Bill > SB111

This bill extends the sunset date for the Pass-Through Business Alternative Income Tax (BAIT) from January 1, 2026, to January 1, 2028, making several important modifications to the existing tax law. The bill allows pass-through entities (businesses like partnerships and S-corporations) to elect to pay a state-level business income tax, with specific conditions: all members must be individuals subject to personal income tax or pass-through entities owned entirely by such individuals. The bill introduces a new provision allowing pass-through entities to apply tax overpayments as credits against estimated taxes in subsequent tax years. Additionally, the legislation clarifies that the tax rate remains progressive, with 9% applied to the first $250,000 of distributive proceeds and 9.9% on amounts exceeding $250,000. The bill also specifies that these changes apply to tax years beginning on or after January 1, 2022, and before January 1, 2028, with overpayments considered eligible if made before January 1, 2027. The act will take effect 91 days after the adjournment of the 2025 regular legislative session, providing a smooth transition and continued tax flexibility for pass-through business entities in Oregon.

Budget and Finance

https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/SB111