Phases in an exemption from commercial activity subject to corporate activity tax reimbursements for certain health care services, including care provided to medical assistance recipients and to Medicare recipients.

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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
A-Engrossed
Senate Bill 125
Ordered by the Senate June 12
Including Senate Amendments dated June 12
Printed pursuant to Senate Interim Rule 213.28 by order of the President of the Senate in conformance with pre-
session filing rules, indicating neither advocacy nor opposition on the part of the President (at the request
of Senate Interim Committee on Finance and Revenue)
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure. The statement includes a measure digest written in compliance with applicable readability standards.
Digest: The Act makes payments received for health care services not taxed by the corporate
activity tax. (Flesch Readability Score: 63.6).
[Exempts] Phases in an exemption from commercial activity subject to corporate activity tax
reimbursements for certain health care services, including care provided to medical assistance re-
cipients and to Medicare recipients. Exempts receipts from medications administered or dispensed
in a clinical setting other than a hospital.
Applies to tax years beginning on or after January 1, 2026[ , and before January 1, 2032 ].
Takes effect on the 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to exemption of health care receipts from corporate activity tax; and prescribing an effec-
tive date.
Be It Enacted by the People of the State of Oregon:
SECTION 1.
Section 2 of this 2025 Act is added to and made a part of ORS 317A.100 to
317A.158.
SECTION 2. Notwithstanding ORS 317A.100, receipts from the administration or dispen-
sation of medications in a clinical setting other than a hospital are excluded from the defi-
nition of commercial activity and are exempt from the tax imposed under ORS 317A.116.
SECTION 3. Section 2 of this 2025 Act is amended to read:
Sec. 2. (1) Notwithstanding ORS 317A.100, receipts from the administration or dispensation of
medications in a clinical setting other than a hospital are excluded from the definition of commercial
activity and are exempt from the tax imposed under ORS 317A.116.
(2) A taxpayer shall subtract from commercial activity an amount equal to 50 percent
of the sum of amounts received as reimbursement paid:
(a) For the cost of health care provided to medical assistance recipients under ORS
chapter 414;
(b) By the Centers for Medicare and Medicaid Services or by a Medicare Advantage plan
for the cost of health care provided to Medicare recipients; or
(c) By the Public Employees’ Benefit Board, the Oregon Educators Benefit Board, the
Children’s Health Insurance Program or the United States Department of Defense, under a
TRICARE contract for the cost of health care provided.
SECTION 4. Section 2 of this 2025 Act, as amended by section 3 of this 2025 Act, is amended
NOTE: Matter in boldfaced type in an amended section is new; matter [ italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 3638
A-Eng. SB 125
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to read:
Sec. 2. [ (1) Notwithstanding ORS 317A.100, receipts from the administration or dispensation of
medications in a clinical setting other than a hospital are excluded from the definition of commercial
activity and are exempt from the tax imposed under ORS 317A.116. ]
[(2) A taxpayer shall subtract from commercial activity an amount equal to 50 percent of the sum
of]
Notwithstanding ORS 317A.100, the following amounts are excluded from the definition
of commercial activity and are exempt from the tax imposed under ORS 317A.116:
(1) Receipts from the administration or dispensation of medications in a clinical setting
other than a hospital.
(2) Any amounts received as reimbursement paid:
(a) For the cost of health care provided to medical assistance recipients under ORS chapter 414;
(b) By the Centers for Medicare and Medicaid Services or by a Medicare Advantage plan for
the cost of health care provided to Medicare recipients; or
(c) By the Public Employees’ Benefit Board, the Oregon Educators Benefit Board, the Children’s
Health Insurance Program or the United States Department of Defense, under a TRICARE contract
for the cost of health care provided.
SECTION 5.
(1) Section 2 of this 2025 Act applies to tax years beginning on or after
January 1, 2026, and before January 1, 2028.
(2) The amendments to section 2 of this 2025 Act by section 3 of this 2025 Act apply to
tax years beginning on or after January 1, 2028, and before January 1, 2030.
(3) Notwithstanding ORS 315.037, the amendments to section 2 of this 2025 Act by section
4 of this 2025 Act apply to all tax years beginning on or after January 1, 2030.
SECTION 6. This 2025 Act takes effect on the 91st day after the date on which the 2025
regular session of the Eighty-third Legislative Assembly adjourns sine die.
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