New Oregon Gross Receipts Tax Proposal.
On December 14, 2016, the group behind Measure 97 (which was defeated at the November 2016 general election), released a booklet setting forth its 2017 legislative proposals. The document includes the basic structure for a new “$100 Million Business Tax” “and is “calling on the Legislature to create this tax.” Highlights of this new gross receipts tax are (1) A 2% tax on Oregon gross receipts (M97 was 2.5%.): (2) All types of businesses would be subject to the tax. (M97 only applied to C corporations.); (3) Utility companies would be exempt; and (4) The threshold for applying the tax would be $100 million of Oregon gross receipts. (M97 had a $25 million threshold.) The booklet states this gross receipts tax would raise $4 billion per biennium (as opposed to the $6 billion that M97 was projected to raise). It is not entirely clear whether this proposal would operate like Measure 97, which modified Oregon’s corporate minimum tax, or if it would replace Oregon’s corporate income tax. However, the $4 billion revenue estimate suggests it would operate as would Measure 97, i.e., as a corporate minimum tax. To date, there is no Oregon legislative sponsor or author identified with this proposal (nor any draft bill language). “A Better Oregon Budget Report,” Dec. 14, 2016, http://www.abetteroregon.org/time-finally-invest/.
City of Portland Enacts Surtax on CEO Pay.
On December 7, 2016, on a 3-1 vote (with one absence),the City Counsel of Portland approved a surtax (in addition to the 2.2% tax Business License Tax) on publicly traded companies operating there whose Chief Executive Officers earn at least 100 times as much as their median workers. Specifically, for tax years beginning on or after January 1, 2017, a 10% surtax is imposed if a company subject to the (2015 adopted) U.S. Securities and Exchange Commission pay ratio reporting requirement reports a pay ratio of at least 100:1, but less than 250:1, on SEC disclosures. If the reported pay ratio is 250:1 or greater, a 25% surtax is imposed. The Portland Revenue Division estimates there are approximately 550 public traded companies that are subject to and paying the City’s Business License Tax with collective liability of $17.9 million annually, and that the new surtax would increase revenue by $2.5 million to $3.5 million annually. Portland City Ordinance 7.02.500, as amended; see also Portland Revenue Division Impact Statement, December 2014 Version.