University students who reside in Oregon will most likely see a wave of tax relief in 2010 for both themselves and their families.
The state House of Representatives is currently considering whether to pass legislation reconnecting Oregon’s tax policy with a series of federal tax deductions aimed at assisting college students. The main provision of Senate Bill 301 would allow around 72,000 individuals to receive up to $4,000 in deductions to offset tuition costs.
The majority of Oregon-residing college students would enjoy a full deduction, as it is available to single tax filers with an income of $65,000 or less and joint filers with a combined income of $130,000 or less. Last Thursday, the Senate passed the bill unanimously with a vote of 29-0, and is now encouraging the House to vote quickly so there will be no ambiguity for Oregonians filing their 2010 taxes.
“The reason we want to get it through so quickly is so taxpayers know how to file their tax returns,” said Sen. Ginny Burdick (D), Senate Revenue and Finance Committee chair. “We want to get it settled because it applies to the 2010 tax year.”
The current voting over SB 301 follows a decision by state lawmakers in 2009 to sever Oregon’s connection to federal tax policies as a cost-saving measure to deal with the recession. The decision, which was hotly contested in both the Senate and the House, was made in House Bill 2157, and saved the state budget tens of millions of dollars.
Lawmakers are now pushing to restore the link to most of these federal policies, arguing that the benefits outweigh the costs.
“This bill, especially the tuition piece, really helps people that need it the most,” said Molly Woon, a Senate Majority Office spokesperson. “For families that are low to middle income or for students that are trying to hold down a job, this is something that will help them out just a little bit more.”
SB 301’s other key provision enables students to remain on their parents’ health care plan free of tax through age 26. This law was passed at the national level in 2009 as part of the highly controversial health care reform bill, but because Oregon was not tied to the federal tax code, it has not yet been applicable to state residents.
SB 301 refused to restore one important tax policy that was severed in 2009. Tax benefits to Oregon businesses, which according to the State Legislative Office totaled $81 million, were denied by HB 2157, and senators have chosen to pass the legislation this year without renewing them.
Sen. Burdick said Republicans did argue in support of these benefits but ultimately chose to pass the bill onto the House without them.
The House Revenue Committee is now set to hold a public hearing Feb. 24 to discuss and vote on the bill. From there, the bill is expected to move quickly through the House and will likely reach a vote by Monday of next week.
Phil Barnhart, Eugene representative and House Revenue Committee co-chair, sees it as an imperative bill and expects it to be passed by a huge majority.
“It’s a fairness issue,” Barnhart said. “I expect to see a vote that is very similar to the one that happened in the Senate.”
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