SALEM — Gov. Kate Brown signed the paperwork to officially call a special session of the Legislature to deal with a tax break for some sole proprietor businesses.
Brown released a proclamation Wednesday calling on the Legislature to meet May 21. She also sent to lawmakers a draft “Legislative Concept” that she says is the blueprint for a bill.
Legislative leaders said they plan to have the special session last only one day and only deal with the tax issue.
Brown had announced April 6 that she would not veto legislation to disconnect the state and federal tax systems. Proponents said the disconnect was needed as a way to blunt the effect of federal tax cuts signed into law by President Trump that would have cost the state more than $240 million.
But, the same day, Brown promised to call a special session to add some sole proprietorships to a 2015 state tax break. The tax break will cost the state about $20 million this year and $30 million in the 2019-2021 budget cycle.
Brown said the move was needed to address an inequity in the state tax system.
“Oregon’s small businesses are the backbone of our thriving statewide economy, but they do not get the same tax break that other businesses were given in 2015,” Brown said in a release about the session. “I’m calling a Special Session to stop this unfairness and create a level playing field for Oregon’s smallest businesses.”
Republicans criticized Brown for not vetoing the bill to disconnect the federal and state tax systems, then turning around and offering a much smaller tax break to a limited number of Oregon businesses.
A legislative analysis showed the tax break would affect only about 9,000 of the roughly 264,000 sole proprietorships in the state.
House Minority Leader Mike McLane, R-Powell Butte, said calling a special session was “political theater” in a year Oregonians will vote for governor. However, both McLane and Senate Minority Leader Jackie Winters, R-Salem, said they expected Republican lawmakers would support the tax cut.
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