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The Oregon Legislature’s work is rarely riveting. And even by this low standard, the state’s annual reconnection to the federal tax code is a bit dry. But boring policy is important, too, and this particular policy is especially important this year thanks to a bill working its way through Congress.

By approving an annual reconnection bill, the Legislature ensures congruency between the federal and state tax codes. This simplifies compliance significantly, as failing to reconnect would require taxpayers to manage multiple sets of books and increase the odds of mistakes and filing delays.

Reconnection also prevents further erosion of the state’s business environment. Given the 43% increase in the state business tax burden between 2019 and 2022, doing the routine, if boring, things to prevent further harm should be a no-brainer.

Reconnecting this year is particularly critical to Oregon’s businesses in light of a bipartisan tax package that passed the U.S. House of Representatives with overwhelming support in January. The proposal, coauthored by Sen. Ron Wyden, D-Ore., would reinstate a handful of important business deductions eliminated in 2017.

Perhaps the most notable is a provision that would allow businesses to deduct research and development costs annually rather than amortizing them over a five-year period. Eliminating the amortization requirement, which spreads the value of R&D deductions thinly over a long period, is particularly important for the sophisticated manufacturers that contribute disproportionately to the strength of Oregon’s economy.

Failing to reconnect to the federal tax code would place Oregon businesses at a significant competitive disadvantage if the federal legislation were to pass, compounding the harm done by the state’s soaring business tax burden. It also would send a loud signal to businesses in Oregon and elsewhere that the state is not committed to supporting companies that invest heavily in research and development. That would be odd given the Legislature’s support in 2023 of measures designed to expand Oregon’s semiconductor industry.

For these reasons, the Legislature must reconnect to the federal tax code this session by passing HB 4034 without amendment.