Most Oregon corporate businesses have been getting a free ride on their state tax bill for many years.  Oregon Ballot Measure 67 is an effort to fairly correct the loopholes that have allowed most every business to essentially avoid state corporate taxes.  It is time that we approve this common sense measure already passed by the Oregon Legislature and signed by the governor.

The following is a summary of the new tax structure:

Under current law, corporations conducting business in Oregon pay $10 minimum income tax; tax has not changed since 1931. Some corporations pay a profits tax of 6.6%. All other businesses pay no minimum or profits tax. Beginning in tax year 2009, the Measure increase $10 minimum corporate tax to $150; some corporations with over $500,000 in Oregon revenues will pay minimum tax of approximately 0.1% of Oregon revenues. Limits tax to $150 for S corprations and partnerships. Sole proprietors are not impacted by this measure. Raises tax rates some corporations pay on profits by 1.3 percentage points until 2011; increase then drops to 1 percentage point and as of 2013, applies only to profits over $10 million. Corporations pay minimum tax or profits tax, not both. Increases filing fees by $50 for Oregon businesses, by $225 for out of the state business. Raises estimated $255 million to provide funds currently budgeted for education, health care, public safety, other services. Because some state money brings in federal matching funds, Oregon will likely receive more federal money if measure passes than if the Measure fails. Other provisions.

Currently, the majority of corporations in Oregon pay the minimum corporate tax of $10.  Yes, they pay ten dollars a year to the state.  This proposal, that minimum tax would go up to just $150.  To put this tax into perspective, $10 probably is not enough to pay the clerk at the Department of Revenue to open the envelope that the tax return comes in and enter it into the DOR computer.  $10 might have been a lot of money in 1931 when the rate was last set, but it is a pittance now.

An additional tax is proposed for businesses with over $500,000 in Oregon gross sales.  That tax would amount to only 0.1% of sales.  Washington State has had a similar tax (the Business & Occupation Tax) which is quite similar.  Washington’s version has a rate about 10-times as much, and applies to all businesses, not just those with over $500,000 in sales.  In all, Oregon’s tax seems quite reasonable, considering the good that it will do for the state’s economy.

Many businesses have claimed in arguments against this measure that the tax will be so burdensome that they will have to lay-off employees.  Those are harsh and attention-getting words at a time when the unemployment rate is so high.  However, for the relative amounts that are under consideration for each business, it seems that there would be other places where these amounts could be made up.

This tax will not be a burden at all for any real business in Oregon.  For the difference that this will make for the majority of us, the residents of Oregon, the benefit will more than make up for the small amounts of taxes involved.

I really don’t consider this a significant increase in taxes.  For the vast majority of Oregon corporations, this is simply an effort to bring the nominal fees up to something that is not so low as to be silly.  This measure will bring needed money into the state treasury to support the services that we need, while being an inconvenience to nearly none of us.  I urge you to vote YES on Oregon Ballot Measure 67.