A timely notice came recently from the Bend Chamber of Commerce regarding tax increase legislation on small business.
According to the Chamber on June 23 the Oregon House narrowly approved HB 2060-A which eliminates the ‘small business tax cut’ for employers with fewer than 10 employees. The ‘small business tax cut’ was originally passed by the 2013 legislature to bring rate relief to all small businesses. It went into effect for the first time in 2015.
The measure states that it limits eligibility for the pass-thru entity tax rates to business operating in one of the following seven economic sectors: agriculture, mining, manufacturing, wholesale trade, transportation and warehousing, information or accommodation & food services. It increases the employment requirement for eligibility from one employee to ten. It applies to tax years 2017 and later.
The Bend Chamber reports that HB 2060-A is effectively a $200 million tax increase on small business and it squeaked through in a special Friday session with a 31-28 vote. The Oregon Senate has already rejected this concept (SB 164) earlier in the session.
Senate Republican Leader Ted Ferrioli of John Day called the heist “gangster government,” and said the violation of the bipartisan Grand Bargain fires off a terrible message to fellow legislators, constituents and to Oregon’s smallest “mom-and-pop” job providers.
The Speaker’s proposal undermines the small business tax cut included in the Grand Bargain. The 2013 Grand Bargain was a bipartisan agreement that included small business tax cuts and included reforms to the state’s broken public pension system.
“We will not tolerate the Speaker’s lawless small business $196 million tax heist. The Senate will not permit the Speaker of the House to hold hostages, derail our bipartisan progress and jeopardize the credibility of the Legislature. The Measure 97 hidden sales tax was massively defeated and we will not pay the gross receipts tax ransom the Speaker is demanding.”
The Speaker’s repeal of the Grand Bargain targets small businesses with less than ten employees for up to 40 percent of tax increases but preserves lower rates for S-corps, LLCs, and LLPs.
Along with the Chamber, we hope you will voice opposition to HB 2060-A to Senate Legislators.
