Lawmakers expedite business tax break

SALEM — The state Senate voted unanimously Tuesday to allow Oregon businesses to claim nearly $100 million in federal tax benefits on their state tax returns.

The unanimous 28-0 vote followed a floor fight in the House Monday that fractured the early peace between Republicans and Democrats in the chamber, which is evenly split between the parties for the first time in Oregon's 151-year history.

Sen. Ginny Burdick, D-Portland, said she would have preferred more time to consider the bill's implications but believes a quick change is critical as next month's tax filing deadline nears.

"I think some discussion would've been beneficial," Burdick said. "But I think the most crucial thing we can do today is get this bill out to Oregonians so they can make important decisions for their businesses and for their tax returns."

In the House on Monday, 11 Democrats joined all 30 Republicans in voting for the accelerated tax breaks on new equipment called "bonus depreciation." Two years ago, Democrats controlled the Legislature and didn't allow the tax breaks.

Gov. John Kitzhaber, who had urged a delay in the vote, said his budget included the breaks and urged the Senate to move quickly.

He told The Oregonian newspaper he didn't think the dispute did serious political damage. "But there is something to be learned as we get into the more contentious issues that we're definitely going to have," he said.

Sen. Brian Clem, of Salem, was among the Democrats who voted with the Republicans, but he told the Salem Statesman Journal, "This is not the way we should have to conduct business this early in the session."

Senate President Peter Courtney and other key Democrats said they will not stand in the way of House changes in the bill, which could be sent quickly to Kitzhaber for signing.

The measures include a number of other tax provisions, including one that would allow an estimated 50,000 filers, based on a means test, to deduct a maximum of $4,000 in tuition and other college expenses paid in 2010.

Republican Rep. Vicki Berger, of Salem, said businesses eventually pay the full cost of the depreciation write-offs but get the tax break up front. Not having it puts the state at a competitive disadvantage, she said.

Democratic Rep. Sara Gelser of Corvallis said the $93 million "cash advance" would pay for five days of school statewide or would provide more than a decade of funding for the Project Independence program to enable seniors to continue living at home.

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