Bill > HB2116

This bill modifies Oregon's personal income tax and corporate excise tax rates to automatically adjust for inflation beginning in tax years 2026 and 2027, respectively. For personal income tax, the bill removes a previous limitation that prevented adjustments to tax brackets for income over $125,000 and instead allows all tax brackets to be annually increased based on the Consumer Price Index (CPI). For corporate excise tax, the bill introduces an annual adjustment mechanism that will modify the $1 million threshold for different tax rates based on changes in the CPI, specifically using the U.S. City Average Consumer Price Index for All Urban Consumers. The adjustments will be calculated by comparing the monthly averaged CPI for the 12 months ending August 31 of the prior year to a baseline period. If any calculated increase is not a multiple of $50, it will be rounded down to the nearest $50. The bill will take effect 91 days after the adjournment of the 2025 regular legislative session, with personal income tax changes applying to tax years beginning on or after January 1, 2026, and corporate excise tax changes applying to tax years beginning on or after January 1, 2027.

Budget and Finance

https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/HB2116