OREGON SMALL BUSINESS ASSOCIATION FILES TAX PARITY INITIATIVE PETITION

“Local, Family & Small Business Fairness Act” levels the playing field between Oregon’s smallest businesses and large corporations while repelling future attacks on small business by Oregon’s legislature

Portland, Oregon –The Oregon Small Business Association announced today it has filed the “Local, Family and Small Business Fairness Act” for the 2020 November General Election. The ballot measure seeks to make all tax rates, calculations and loopholes afforded to the largest publicly-traded companies automatically available for small and family businesses. The ballot measure is in direct response to Senate Bill 1528, which would gut tax relief for Oregon’s smallest businesses, while providing the wealthiest Oregonians with new tax credits to avoid paying higher federal tax liability.

“This legislation forces our smallest businesses, including 192,000 mom and pop “schedule-C” tax filers, to shoulder an additional 20% tax payment increase while giving a special carve out for the wealthiest and most powerful people in our state,” said TJ Reilly, president of the Oregon Small Business Association (OSBA). “The average mom and pop business will pay an additional $359 in taxes under this bill.  These are Oregonians whose small businesses report less income than the federal poverty level.  It is unconscionable that the Legislature or Governor Kate Brown would increase their tax burden by 20% while protecting large corporations that can game the system with special tax credits to avoid paying higher taxes.”

Businesses facing higher tax burdens as a result of Senate Bill 1528 already pay a higher effective state tax rate than large C-corporations.  According to estimates provided by the Legislative Revenue Office, SB 1528 would raise approximately $258 million in new revenue, and roughly half (40%) would be paid by these small schedule-C filers.

“Senate Bill 1528 would force Oregon’s smallest businesses to shoulder roughly $103 million in new revenue while providing Oregon’s wealthiest a $14 million “tax credit auction” where they can bid on tax credits to offset additional tax liability recently passed by Congress,” said Reilly.  “Oregon’s Democratic leadership claimed they would protect small businesses this session, yet instead have passed a direct blow to our local businesses.  We believe it’s time voters step in and correct this unfair and extreme tax structure.”

If successfully passed by voters in 2020, the “Local, Family & Small Business Fairness Act” would require a revision of Oregon’s tax codes to ensure any tax advantages given to large, publicly-traded, and out-of-state corporations operating in Oregon would be automatically allowed for thousands of small businesses and solo entrepreneurs.

The “Local, Family & Small Business Fairness Act” includes the following language:

Whereas, large corporations wield far more political influence than small and family businesses;

Whereas, the top tax rate on Oregon business income for the largest corporations is 7.6%;

Whereas, the top tax rate on Oregon business income for small and family businesses is 9.9%;

Whereas, the passage of SB 1528 (2018) would increase the tax burden on small and family businesses while leaving the largest corporations untouched;

 Therefore, the People of Oregon demand fairness in business taxation for all Oregon businesses and hereby amend the Oregon Constitution by adding the following section:

 Article IX, Section 1d

 (1) The maximum small business tax rate in Oregon shall not exceed the tax rates applied to the business income of the largest corporations doing business in Oregon for the prior tax year.

 (2) The maximum small business tax rate includes any marginal tax rate, or combinations of marginal tax rates, applied to small business income whether assessed upon the business entity itself, schedule C business income, schedule E business income, or other similar types of pass-through business income. If the maximum small business tax rate cannot be conclusively determined by statutory analysis, the state shall determine the net marginal excise or income tax rates levied upon Oregon taxable income of the largest corporations doing business in Oregon by determining the lowest marginal tax rate schedules applied to Oregon taxable income of publicly traded corporations with at least $100 million in Oregon sales during the most recently available tax year.

 (3) “Small business” means simple business structures that include sole proprietorships, partnerships, limited liability companies, trusts and corporate entities with fewer than 100 shareholders.

 (4) The maximum marginal tax rate guaranteed to small business pursuant to subsection (1) is limited to the first $10 million of Oregon taxable small business net income for tax years beginning on or after January 1, 2021.  This limit shall be adjusted to account for inflation in future years using the same methods employed to set cost of living adjustments in state budgets.

 (5)  “Net marginal excise or income tax rates levied upon Oregon taxable income” shall mean the average marginal tax rate actually levied upon Oregon taxable income after applying all tax credits available to the fifty largest corporations doing business in Oregon that are not otherwise available to small businesses, which tax rate shall be determined by November 1 of each year to establish the guaranteed tax rate for small business to be used in the taxpayer’s immediately following calendar or fiscal tax year.

Chief petitioners for the initiative include three small business owners from around the state, representing various industries.  Shane Otley operates a cattle ranch in Burns with his family; Liz Maguire runs a tech-based business with her husband Brian in the Portland-metro area; and Dr. Scott Roberts has a dental practice in North Bend. Each chief petitioner cited concern over the lack of support and fairness for small businesses in comparison to the tax incentives and special deals afforded to Oregon’s largest corporations and wealthiest individuals.

The ballot measure filing can be found on the Secretary of State’s Elections Division web page.

More information about Oregon Small Business Association’s position on Senate Bill 1528 can be found at www.oregontaxalert.com.

Questions please contact [email protected]

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Oregon Small Business Association
Oregon Small Business Association.com
PO Box 23815
Portland, OR, 97281