Committee hears healthcare providers and education advocates on SB 125 CAT exemption; supporters cite access risks, opponents urge revenue neutrality

Chair Meek opened the public hearing on Senate Bill 125 following the Legislative Revenue Office briefing and directed staff to summarize the bill.

Staff summary: A committee staff summary explained that Senate Bill 125 would exclude from the corporate activities tax (CAT) reimbursement receipts from medical assistance under ORS chapter 414 (medical assistance), Medicare, the Public Employees' Benefit Board (PEBB), the Oregon Educators Benefit Board (OEBB), the Children's Health Insurance Program (CHIP), and TRICARE. The staff summary said the bill also would add an exclusion for receipts from administration or dispensing of medications in a clinical setting other than a hospital. SB 125 would apply to tax years starting on Jan. 1, 2026, and end before Jan. 1, 2032. Staff also placed two related bills on the table for the committee's schedule: SB 382, which would exclude retail prescription drug sales receipts from the CAT for tax years beginning on or after Jan. 1, 2026, and SB 707, which would expand an existing exemption for pharmacies with fewer than nine locations to include critical access pharmacies; SB 707 also would take effect on or after Jan. 1, 2026.

Supporters' testimony: Dozens of witnesses, primarily…