Committee hears concerns about contractor tax-compliance certificate requirement; work session carried over

The House Committee on Revenue heard testimony June 3 on House Bill 2084, which would require most public contractors to demonstrate tax compliance as a condition of state contracts and would require a Department of Revenue certificate for agency contracts valued over $25,000. The committee considered a dash-5 amendment that replaces the bill and raises an ownership threshold from 10% to 20% for owner-level checks.

John Hawkins, past chair of the Oregon Society of CPAs and a CPA with REDW Advisors, testified in opposition to the bill as drafted, saying the society supports tax compliance goals but is concerned about scope and implementation. "One of the things that will happen with this bill is that instead of just having the contractor business provide a certificate of tax compliance, it would also require numerous owners perhaps," Hawkins said, and added that increasing the ownership threshold to 20% is an improvement.

Task Force Oregon's Jody Weiser offered support for the amended bill, praising the responsiveness of the draft and saying it would help prevent "tax scofflaws" from contracting with the state. Deanna Mack, administrator of the Department of Revenue's Collections Division, told the committee the agency estimates it would need additional staff to process anticipated certificates: "We calculated the amount of time it spends to process that ... I think the request was 12 positions," she said, describing a mix of public service representatives and administrative staff to handle business and personal income tax program checks. Mack said compliance checks are quick for taxpayers who are already current, but resolving noncompliance can be time-consuming and is the driver of staffing needs.

Committee members asked whether the Department of Administrative Services (DAS) contract inventory suggested the volume of work; Mack said DAS reported about 6,000 contracts in 2024 but that the agency had not provided a dollar-range breakdown for the number above the $25,000 threshold. The Legislative Fiscal Office fiscal note was pending in committee at the time of testimony. Because the committee did not have completed paperwork and fiscal estimates, Chair Nathanson carried over the work session and closed the public hearing to allow time for additional information.

The dash-5 amendment would require DOR-issued certificates for agency contracts over $25,000 and direct the Secretary of State to study methods to improve the reliability of the business registry. Testifiers asked for clarity on the scope of "owner" and for funding to staff the Department of Revenue to avoid delays for compliant contractors.