In a down economy the money has to come from somewhere. One idea was taxing the 1031 Exchange which has traditionally been a nontaxable event on both state and federal taxes. The bill would have made the Exchange a taxable event in Oregon. The summary at the header of the bill reads:
Requires addition to taxable income for Oregon tax purposes of amounts attributable to like-kind exchanges and excluded from federal taxable income because of operation of certain federal law. Applies to tax years beginning on or after January 1, 2010.
1031 is a part of the federal tax code. Wouldn’t creating a state specific tax on it be akin to taxing a 401k (which also takes its name from federal tax code)?