After strongly defeating a ballot measure to raise corporate taxes last year (96 percent of NFIB Oregon members were opposed to it), voters might have to face the issue yet again.
Legislators are considering a proposal that would replace the existing corporate income tax with a gross receipts tax—one that would apply to most businesses, not just corporations, according to The Oregonian.
The tax would help to make up for what the state is projecting as a $1.6 billion shortfall in the coming biennium, but what hasn’t been reported on is the over $1 billion in new revenue that is expected to come in over the next two years, NFIB/Oregon State Director Anthony Smith said.
“Oregon’s never brought in as much revenue as it will in the next couple years, but that’s not as much as the government wants to spend,” he said.
A gross receipts tax would be a huge change for all businesses, not just those classified as C corporations. It would apply to businesses that are currently pass-through businesses—those that report their business income tax on their personal income tax filing.
“A gross receipts tax regardless of who you tax is going to affect small business and our customer, partially because of the pyramid effect a gross receipts tax has,” Smith said.
The tax applies to the largest companies on down to the smallest. Each company is taxed on total revenue collected, so by the time a product reaches the consumer, it’s been taxed several times. “It hurts low-income people more than it hurts high-income people,” Smith argued.
Priority Oregon, a business-backed coalition fighting the gross receipts tax, appeals to the public by claiming the tax is simply a sales tax in disguise—something Oregon residents have defeated over and over again, The Oregonian reports.
