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Small Business & New Taxes Report from the 2001 Legislature

1. Personal Property Tax Relief:

HB 2111 raises the exemption for personal property taxes from $10,000 to $20,000.  This will exempt over 14,000 small business statewide. It save millions of dollars and thousands of hours small business owners spend meeting the requirements.

Status: In House School Funding and Tax Fairness/Revenue Committee and

hearings are being held.

2. Gross Receipt Tax:

House Bill 2827 imposes a gross receipt tax.

Status: In House School Funding and Tax Fairness/Revenue Committee.  No public hearing has been held.

3. Tax relief for Oregon based companies.

HB 2281 changes the way multi-state corporations are taxed, eliminating their payroll and property as factors and focusing exclusively on in-state sales.  This change would benefit Oregon based companies.

Status: In House School Funding and Tax Fairness/Revenue Committee and holding hearings.  Public hearings have been held.

4. Reduce the Capitol gains rate:

SB 67 & HB 2073 would reduce the capital gains rate to 5%.   Currently Oregon has one of the highest capital gains rate in the nation and is a factor in Oregon loosing capital investment.

Status: SB 67 is having hearings in the Senate Revenue Committee

5. Corporate tax Increase:

There is legislation being considered to increase the corporate tax rate to pay for higher education.

Status: No bill number has been assigned.

6. Eliminate the small business owner penalty:

HB 2279 addresses the problems of local governments instituting their own business income taxes.  Business income taxes levied by Portland and Multnomah County allow for owner compensation…but businesses that are personally owned like small businesses are capped at $53,000 on how much owner compensation they are allowed to subtract from the taxable income.  Publicly owned companies are free to claim unlimited owner compensation deductions.  HB 2279 would require local governments to use the state business income standard when applying a business income tax.  This would prevent local business income taxes from discriminating against small business owners.

Status HB 2279 is having hearings in the House School Funding and Tax Fairness/Revenue Committee

7. Business Activities Tax:

House Bill 3942 establishes business activities tax.  Computes tax base so as to approximate gross receipts from business activity in Oregon less purchase.  Most importantly it would tax business whether they make a profit or not.  Reduces personal income tax rates.  Establishes reduced tax rate on capital gains.  Increases personal exemption credit.  Makes earned income credit refundable.  Eliminates corporate excise and income taxes.

Status: House School Funding and Tax Fairness/Revenue Committee, having hearings and Public meetings statewide.