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The Portland Arts tax is filed separately with the City. We could debate whether or not TurboTax *should* do it, but they don't. it appears that this tax is deductible for Federal purposes, even beyond the $10,000 cap on state and local taxes. However, the next wrinkle is that Turbotax carries that item from the federal worksheet to line 32 of your Oregon return as an estimated tax - which it is *not*. that is a quirk in TurboTax that should be addressed. 

If the Portland Arts Tax is deductible somewhere else on OR-40, please advise.