First, I want to say thank you to those who helped defeat Measure 97 by using their voice and casting a vote. However, the fight is not over. There has been a lot of speculation about what to expect from the Oregon Legislature on the heels of Measure 97’s defeat that will directly affect our local businesses, and I feel a role of the Chamber is to bring awareness of potential issues that may affect our local businesses in the upcoming session:
Tax reform. Senator Mark Hass (Beaverton) has been vocal about his support for a 0.4% Commercial Activities Tax in exchange for eliminating corporate income taxes and lowering personal income taxes. It seems likely that 2017 will be the year that this proposal gains traction.
Property taxes. Senator Hass has also proposed eliminating the 3% annual growth cap on assessed value in exchange for moving to market-value based assessments coupled with a significant homestead exemption. This translates into an increase in business property taxes and would likely be part of a comprehensive tax overhaul proposal in the future.
Corporate Tax Disclosure. For the past several years, the legislature has toyed with the idea of passing legislation requiring C corporations to disclose business and tax information to the Secretary of State to be posted on a public website. It would not be surprising to see a full-throttle effort to pass this type of legislation next year.
Creative tax increases. For the past several years, the legislature has utilized a loophole that allows it to both extend existing tax credits (revenue deduction) and raise taxes (revenue increase) in the same legislation, thus allowing it to avoid the 3/5 supermajority requirement for raising taxes. This continues to inflict a significant emerging threat to the business community, and one we will be watching closely.
Supermajority no longer required. The Oregon Supreme Court handed legislative tax-raisers a victory in the past year by ruling that it no longer requires a 3/5 supermajority vote of the legislature to raise revenue through the elimination of tax credits or deductions. For years, certain legislators have eagerly awaited the prospect of scaling back or eliminating tax deductions such as the mortgage interest deduction. Next year will be the first session where this will be possible with a simple majority vote – a huge implication for Oregon businesses.
The Tillamook Area Chamber of Commerce does not have a position on these items but we encourage you to take a look at how they may affect your business and let us know if you have a concern. We will do our best to keep you updated and informed as the legislative session approaches.