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Tax Credits


 Overview

​The 1995 Budget Accountability Act (OR​S 291.201) defines a tax expenditure as: any law of the Federal Government or of this state that exempts, in whole or in part, certain persons, income, goods, services, or property from the impact of established taxes, including, but not limited to tax deductions, tax exclusions, tax subtractions, tax exemptions, tax deferrals, preferential tax rates, and tax credits.

The term "tax expenditure" derives from the parallel between these tax provisions and direct government expenditures. For example, a program to encourage businesses to purchase pollution abatement equipment could be structured with an incentive in the form of a tax credit or a direct payment by the state to businesses. 

Tax expenditures can be viewed as: (1) providing financial assistance to certain groups of taxpayers, (2) providing economic incentives that encourage specific taxpayer behavior, or (3) simplifying or reducing the costs of tax administration. While the third of these policy objectives eliminates inefficiencies within the tax code, the first two could be implemented with direct expenditures rather than tax expenditures​.​

The biennial tax expenditure report accompanies the Governor's recommended budget submitted to the Legislature before each session. It describes provisions of Oregon tax laws that impart special treatment to a group of taxpayers, such as exclusions, credits, deductions, and exemptions. 

This report describes each provision and provides revenue loss estimates and evaluations of effectiveness. It also includes summary tables that group tax expenditures according to tax program and budget program/function. See ORS 2​91.203​ for the statutory reference that requires these reports.


The Department of Revenue (DOR) provides access to currrent and historical tax expenditure reports, and other tax and statistical report information. 

DOR Statistical Reports
 
For additional information, email the Dept. of Revenue Research Section at dor.research@oregon.gov.



 Programs

Description
​The Oregon Department of Energy issued grants for renewable energy development projects from 2012 to 2019; the grants were funded through tax credit auctions overseen by the Oregon Department of Revenue. The final set of RED Grant awardees was announced in September 2019. 

ODOE awarded RED Grants up to a maximum of $250,000 per project, not to exceed 35 percent of eligible project costs. The grants were available through a competitive process to entities that invest in renewable energy systems. Grant dollars are not approved or distributed until completion of the project. 

This report covers RED Grants approved before June 30, 2019 (Fiscal Years 2013 through 2019). 

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Renewable Energy Development (RED) Grants
Description
The Oregon Department of Energy’s Energy Incentive Program issued tax credits to Oregon businesses, public agencies, and nonprofits that invested in energy conservation or transportation projects. The Energy Incentive Program tax credits ended (sunset) at the end of the 2017 tax year, which was dependent on the applicants’ tax year. 

This report covers July 1, 2014 through June 30, 2019. Withdrawn, Denied, Inactive, and Expired projects are excluded. 

​​Notes
*The report shows tax credits issued and may differ from tax credits allowed due to rounding.

* Commercial conservation projects with project costs under $20,000 were administered under the Small Premium Projects (SPP) program.
For SPP projects, ODOE used predetermined tax credit amounts based on a project's anticipated energy savings, up to a maximum credit of $7,000 per project. The tax credit could not exceed 35 percent of the certified costs.

* Commercial, agricultural, and industrial conservation projects with project costs greater than $20,000 were administered through a competitive process.

* Tax credits offered through the transportation program could go to fleets for projects that replaced or modified two or more vehicles to use alternative fuels, or to projects that installed or constructed a facility for mixing, storing, compressing, or dispensing fuels for alternative fuel vehicles, including electric charging, compressed natural gas, and propane fueling stations. 
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Energy Incentive Program (EIP) Tax Credits ​
Description
The Oregon Department of Energy issued residential energy tax credits to Oregonians between 1977 and 2017. Incentives were available for ductless heat pumps, furnaces, electric vehicle charging infrastructure, solar energy systems, and other energy efficiency devices. The RETC program ended (sunset) on December 31, 2017, and final applications were due June 1, 2018. 

Tax credits that met the statutory criteria of $2,000 or more are reported below. Generally, these credits were for solar or wind installations. This report covers July 1, 2014 through June 30, 2019 and includes the final set of tax credits issued under the program. 

Notes  
* Reported tax credits issued may differ slightly from tax credits allowed due to rounding.

 * The tax credit amount for Solar Electric (Photovoltaic) systems is calculated at $2.10 per watt of the installed capacity of direct current for 2013, $1.90 per watt for 2014, $1.70 per watt for 2015, $1.50 per watt for 2016, and $1.30 per watt for 2017, based on tax year. 

* Available credits were capped at $6,000 per system, or $1,500 per year taken over four years, and may not to exceed 50 percent of system cost. 

* For photovoltaic systems, "Units Capacity" was watts of the installed capacity, direct current (DC).

​* This report combines data from Oregon Department of Energy databases and the PowerClerk database. Some data from the online PowerClerk database has been converted to make it consistent with ODOE data. For systems where the data source is ODOE’s database, "Total Energy (MMBTU)" is a generic estimate of annual energy production for each photovoltaic system. It is not based on project-specific data. For systems where the datasource is the PowerClerk database, "Total Energy (MMBTU)" is a project-specific estimate of annual energy production for each system. 
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Residential Energy Tax Credits: $2,000 or More​
Description
The Oregon Department of Energy issued tax credits under the Biomass Producer or Collector Tax Credit program for the production and collection of biomass material — such as wood, methane, or manure — that was sourced in Oregon and used as biofuel.  

This program ended (sunset) at the end of the 2017 tax year, which was dependent on the applicants’ tax year. 
This report covers July 1, 2014 through June 30, 2019 and includes the final set of tax credits issued under the program. ​Withdrawn, denied, and incomplete applications are excluded.  
Notes
 * The report shows tax credits issued and may differ slightly from tax credits allowed due to rounding.

* The tax credit rate depends on the biomass material type. 

* The energy value of the biomass materials in Million Btu (MMBtu) is estimated. 
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Biomass Producer or Collector Tax Credits Program
Description
​In 2017, the Oregon State legislature passed House Bill (HB) 2066. This bill moves a portion of the Biomass Collector or Producer Tax Credit program from the Oregon Department of Energy to the Oregon Department of Agriculture (ODA).  

Bovine Manure Tax Credit (Sections 6 through 11 of HB 2066) requires ODA to administer tax credit certifications to qualified bovine manure producers or collectors that produce biofuels. 

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Bovine Manure Tax Credit Program


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