Oregon Gov. Kate Brown wants to extend a tax break to small business owners, calling for a special session of the legislature next month.
About 9,000 sole proprietor businesses could qualify for the tax relief which is already offered to large companies, according to the governor’s office. In a statement released Tuesday after meeting with legislative leaders she said the state tax system has an “obvious inequity” that can be fixed with a simple change.
“I’m simply not willing to let these Main Street businesses – entrepreneurs, mom and pop shops, and start-ups – go through another tax year with unfair tax treatment as compared to their larger competitors,” she said.
Brown, a Democrat, called for the legislature to convene May 21 and pass the change so it could take effect for 2018 taxes.
Her announcement came only weeks after Brown signed a bill that blocked the state from replicating a 20% tax break for certain businesses included in the federal Tax Cut and Job Acts passed by Congress and signed by President Trump last year.
The federal changes – which under Oregon law would have also applied on the state level – would have resulted in a $1 billion “hit to the state budget,” Brown told reporters earlier this month.
Republican leaders had criticized Brown for signing the bill, calling it a tax increase on businesses.
Brown’s new tax proposal could cost the state $15 million annually, the Oregon Public Broadcasting network reported.
The Oregon Legislative Office expects to present a fuller analysis of the financial impact during the special session.
House Republican Leader Mike McLane described the governor’s call for the special session as “political theater” in a statement, but did not express opposition.
“Let’s hope Governor Brown and legislative Democrats will limit the scope of the session to the stated purpose instead of allowing for the introduction of unrelated policy bills,” he said.
Oregon will hold its gubernatorial primary election on May 18. Brown, who is seeking re-election, is heavily favored in the primary and holds a lead against the top Republican challenger, according to a poll by Oregon Public Broadcasting.