The part-time legislature in my little backward state of Oregon is still trying to complete last year’s tax code—the one we are using to file taxes, ahem, right now. A recent bill would let about 50,000 taxpayers here take the same $4,000 deduction for college costs that they are allowed on their federal returns.
Who could have a problem with this? How about business groups that want their share of the goodies? When errors in the drafted bill sent it back to the Oregon House, corporate lobbyists started pushing for the bill to also include the state equivalent of an existing federal tax break for purchases of equipment. While everybody talks, the tuition deduction is on hold.
And who knows what’s going on with taxes in the Oregon legislature anyway? Apparently not the legislators, who aren’t aware of what they did two years ago. As Michelle Cole, reporter for The Oregonian, hilariously put it, “During discussions about the drafting mistakes, lawmakers learned that legislation passed in 2009 permanently disconnected Oregon’s tax code from those federal provisions.”
Cost to the state of the tuition break for parents & students: About $10 million. Cost of the business break: About $90 million.
Oh, and since the bill has been held up, if the deduction does pass, then any parents who have already filed their tax returns will have to amend their state returns to get the benefit.