Senate Bill 1
Senate Bill 1 passed in 2023, making Oregon the first state that we know of to collect race and ethnicity information voluntarily provided by taxpayers with their tax returns for use in analysis of revenue policy. The more complete the data the department receives, the more accurate picture can be developed of how tax policy affects Oregonians. It is therefore important to ensure that as many taxpayers as possible are aware of this program and are enabled to participate.
The measure requires the Oregon Department of Revenue (DOR) to create a system that allows taxpayers to voluntarily provide information about their race and ethnicity when they file their personal income tax return. It also requires that the department protect the data and only use it for specific research purposes. A form to collect the data will be available as part of 2024 personal tax returns that will be filed during the 2025 tax season.
How will the information be used?
Voluntary self-identification information will provide additional data for use by the agency’s Research Section.
This data can be used to evaluate Oregon tax policy and its effects on different races and ethnic groups in support of the state’s vision of building a more equitable Oregon where everyone has the opportunity to thrive, and everyone’s voice is heard.
With this data, it may be possible to determine the impact of tax policies on different racial and ethnic groups and to identify potential inequities in tax policy. Where inequities exist, Oregon leaders may consider and enact policies to mitigate them.
How will the information be gathered?
Voluntary Self-Identification of Race and Ethnicity will be a separate form included with the Oregon income tax return on which taxpayers can voluntarily provide race and ethnicity information. The demographic choices available on the schedule will mirror race and ethnicity options in the Oregon Health Authority “REALD” program. Unlike OHA, DOR won’t gather language and disability information.
DOR will also have an option, through Revenue Online, for those who do not file a tax return to voluntarily provide this information. This option will also be available for tax filers who wish to provide the information directly to DOR rather than through their tax preparer.
Will the information be protected?
Safeguards will be put in place to separate the storage of race and ethnicity information from personally identifiable taxpayer information.
The information will be collected and used for research purposes only. Senate Bill 1 prohibits use of the race and ethnicity information for audit and collection purposes, and it will not be available to department staff who perform those functions.
Senate Bill 1 prohibits tax professionals and tax software companies from using the data for purposes other than in their role in assisting the taxpayer in filing their return.
The department is prohibited from sharing the data with the IRS.
Starting in 2024, DOR will annually report to the legislature the effectiveness of measures undertaken by the department to ensure data security.
When will the data be collected and when will reports on it be produced?
- The information will be collected starting with 2024 tax year returns, which will be received by the Department of Revenue in 2025.
As a taxpayer, why should I provide this information?
It is important to maximize participation across Oregon’s tax filer population to help provide an accurate representation of tax filers. The more taxpayers who voluntarily provide their race and ethnicity information, the more accurate the results—alongside Census data—can be in identifying potential inequities in current and future tax policy.
The agency is drafting a communications plan to educate the public on how voluntarily providing this information will benefit our legislators and tax policy makers in the state. That plan will include partnering with community organizations, partner agencies, and others who have a direct connection to taxpayers.