Small Business Tax Parity Initiative filed today

By NW Spotlight

The Oregon Small Business Association filed a ballot measure petition called the Small Business Tax Parity and Fairness Initiative.   The petition is in response to SB 1528 which raises taxes on nearly 300,000 Oregon small businesses (Big c-corporations exempt) while at the same time directing the money to a special tax credit fund designed to give tax breaks aimed at Oregon’s most wealthiest.  SB 1528 further divides a wedge of tax disadvantage for small business compared to big business.  The Small Business Tax Parity and Fairness Initiative aims to make things more equal.

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.

Here is part of the initiative:

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:

(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.