Bill > SB519

This bill creates a state income tax exemption for veterans, allowing them to subtract all retirement pay or pension received from military service from their federal taxable income. The bill defines "Armed Forces of the United States" to include all regular and reserve components of the military branches, including the Army, Navy, Air Force, Marine Corps, Coast Guard, and Space Force, as well as the National Guard. A "veteran" is defined using Oregon Revised Statutes (ORS) 408.225, with the notable modification that the individual may have been discharged under honorable or other than honorable conditions. The tax exemption has some limitations: the subtracted amount cannot exceed the total retirement pay or pension received, and it cannot include any amounts already subtracted under another existing tax provision (ORS 316.680). The Department of Revenue is authorized to create rules to implement this exemption, which will take effect for tax years beginning on or after January 1, 2026, providing tax relief for veterans on their military retirement income.

Budget and Finance

https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/SB519