An Odd Take on Business Taxes in Oregon

Last week (June 13), The Oregonian ran an article with an odd take on taxes in Oregon.

The article – titled “Business taxed more, people still taxed most in Oregon” and written by Brent Walth and Bill Graves – opened: “Oregon businesses will continue to enjoy one of the lowest tax burdens in the nation even after the Legislature voted last week to raise their taxes.”

Really?

As for the tax hikes, the state’s corporate minimum tax based on sales revenue (i.e., a gross receipts tax) was increased; the corporate income tax rate was increased to 7.9% (previously 6.6%); and personal income tax rates were increased, with new rates of 10.8% and 11% added on the top end of the rate structure (previously, the top rate was 9%).

Previously, Oregon had a heavy tax burden for businesses and entrepreneurs. For example, the state ranked 34th on the SBE Council “Business Tax Index 2009.”

Now the state will have the highest state personal income tax rate in the nation. And by the way, most businesses – more than 90 percent – pay the personal income tax as sole proprietorships, partnerships, S-Corps, etc. The corporate income tax rate will move from the middle of the pack to one of the more burdensome. And the gross receipts tax will hit many businesses quite hard.

In reality, Oregon’s weighty business tax burden got much worse.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council