PORTLAND, Ore. (PORTLAND TRIBUNE) — Taxes in the Portland region are getting so burdensome and complex, larger businesses and higher-income households are thinking of moving away.
That was the warning from a panel of tax experts who spoke to the Portland Business Alliance members at its monthly forum on Wednesday, Jan. 20. But the experts also said state, regional and local elected leaders could work together to streamline the filing requirements and increase revenue collections from out-of-state companies at the same time.
“There is a burden paid by every resident and consumer in this region,” said PBA President and CEO Andrew Hoan. “But there are also win-wins, and we need to work with a partner in government to accomplish them and capture more out-of-state revenue.
The experts on the online forum were: Jeff Newgard, a principal, and state and local tax lobbyist with Peak Policy LLC; Nikki Dobay, a partner and tax expert with the Eversheds Sutherland law firm; and Daniel Lapour, a partner and state and local tax expert with the Moss Adams accounting firm.
All of them noted that several new state, regional and local taxes had been approved in recent years. Among those taxes are a Corporate Activities Tax created by the 2019 Oregon Legislature to fund schools, a 1% business and personal income tax surcharge approved by Metro voters in May 2020 to fund homeless services, a variable personal income tax surcharge approved by Multnomah County voters in November 2020 to fund pre-school programs, and a 1% income tax surcharge on larger businesses approved by Portland voters in November 2018 to fund clean energy programs.
According to the experts, all of the new taxes are paid by people living in the region, either directly or through higher costs for goods and services.
But more than that, the cost of compliance has become more challenging. That is especially true because the rules for the regional and local income taxes are different from the state income taxes, which were changed in 2018 to collect more money from out-of-state companies.
According to Hoan, the PBA is now involved in a Multnomah County Circuit Court proceeding initiated by Metro to declare that its new income tax complies with state law. Hoan said it is an opportunity to ensure Metro complies with the state rules, which could help persuade county and city officials to do the same.