(Graphic courtesy of Bend Chamber and EDCO)
The Bend Chamber of Commerce and Economic Development for Central Oregon strongly urge you to vote no on Measure 118 in November. If approved by voters, Measure 118 would enact the largest tax increase in Oregon history to businesses, dealing a devastating blow to Oregon’s economy and driving up costs for businesses and consumers alike.
What is Measure 118? It’s a gross receipts tax on businesses with more than $25 million in annual Oregon sales. To be clear, it would impose a 3% tax on a corporation’s gross annual sales, not profits or income. That means regardless of whether a business makes a large profit, small profit or loses money, they would be forced to pay this new $6.8 billion tax on the goods or services they provide. Businesses would have no choice but to raise prices, cut jobs, move out of the state, or even shut down completely.
If passed, the measure would result in a costly tax-on-a-tax, creating a compounding effect as it impacts every step of the supply chain in Oregon. Beginning with raw materials, a made-in-Oregon product could be taxed at the 3% rate as many as five times before it reaches a consumer, resulting in a cumulative 15% tax. What types of businesses would be affected? Consumers can expect price increases for everyday goods and services like fuel, phones, groceries, utilities, healthcare, prescriptions, clothes, and other home goods.
The cost of living is already high, with Oregon households spending over $11,000 per year more on the same goods and services than they did in 2021. Measure 118 would only exacerbate that — in perpetuity. Proponents of the measure, a group of out-of-state activists, are calling this the “Oregon Rebate,” no doubt hoping that people will draw similarities between this and the Oregon Kicker. After all, who wouldn’t want free money annually?
This measure, supposedly designed with the intention to help level the playing field and redistribute wealth from businesses to residents, will have the opposite effect. It will hurt those who can least afford it, including seniors and families on fixed incomes. The impact of this bill will cost Oregonians far more than the check they would allegedly receive. Add to that the fact that there is no guarantee the new revenue will end up in the hands of Oregonians—the legislature could redirect the funds elsewhere via simple majority vote with no accountability to the public—and the faults of Measure 118 are overwhelming.
The state’s Legislative Revenue Office predicts Measure 118 would significantly dampen economic growth, costing 28,000 jobs and reducing wages. It would effectively result in a negative cash flow because the net increase in Corporation Excise Tax collections would be less than the amounts required to fund the program. Oregon is already one of the most highly taxed states in which to do business — ranked #49 on the Tax Foundation’s Corporate Tax Index. If Measure 118 is approved by voters, it would put Oregon unenviably at the top of that list. Additionally, it would make Oregon the only state in the nation with two state-imposed gross receipts taxes (the other being the .57% Corporate Activities Tax).
Economic Development for Central Oregon’s (EDCO’s) role is to move, start and grow primary businesses in Deschutes, Jefferson and Crook Counties. These efforts are already facing significant headwinds due to issues like inflation, the cost of labor, interest rates, and housing costs. If Measure 118 is successful it will make new business recruitment virtually impossible and, more importantly, stagnate business growth for existing employers. Existing businesses, who contribute to the local economy through payments to other local suppliers and payroll and property taxes, will become less competitive against their out-of-state peers. In a state like Oregon, which doesn’t have a sales tax, corporate income taxes shoulder the burden when it comes to the revenue stream for the State. Simply put, creating an environment where it doesn’t make financial sense for businesses to operate would only break the branch we’re sitting on.
Nearly every elected official in Oregon, regardless of political party, has come out in opposition to Measure 118. Joining them in opposition is Governor Tina Kotek and 500 businesses, groups and organizations. Are you interested in learning more? Please visit NOonMeasure118.com to join the growing coalition against Measure 118 and share this information broadly among your networks.
bendchamber.org • edcoinfo.com
The above article was prepared by the author in his/her own personal capacity. The opinions expressed in the article are the author’s own and do not necessarily reflect the views of Cascade Business News or of Cascade Publications Inc.
