Link to Owner Dr. Robert B. Pamplin Jr.



Portland Business Alliance monthly forum's panel also say that there's work to be done on streamlining tax filing requirements and increasing collections.

COURTESY PBA - The announcement for the Portland Buisness Alliance forum.Taxes in the Portland region are getting so burdensome and complex, larger businesses and higher-income households are thinking of moving away.

COURTESY: PBA - Andrew HoanThat was the warning from a panel of tax experts who spoke to the Portland Business Alliance members at its monthly forum on Wednesday, Jan. 20. But the experts also said state, regional and local elected leaders could work together to streamline the filing requirements and increase revenue collections from out-of-state companies at the same time.

"There is a burden paid by every resident and consumer in this region," said PBA President and CEO Andrew Hoan. "But there are also win-wins, and we need to work with a partner in government to accomplish them and capture more out-of-state revenue.

The experts on the online forum were: Jeff Newgard, a principal, and state and local tax lobbyist with Peak Policy LLC; Nikki Dobay, a partner and tax expert with the Eversheds Sutherland law firm; and Daniel Lapour, a partner and state and local tax expert with the Moss Adams accounting firm.

All of them noted that several new state, regional and local taxes had been approved in recent years. Among those taxes are a Corporate Activities Tax created by the 2019 Oregon Legislature to fund schools, a 1% business and personal income tax surcharge approved by Metro voters in May 2020 to fund homeless services, a variable personal income tax surcharge approved by Multnomah County voters in November 2020 to fund pre-school programs, and a 1% income tax surcharge on larger businesses approved by Portland voters in November 2018 to fund clean energy programs.

According to the experts, all of the new taxes are eventually paid by people living in the region, either directly or through higher costs for goods and services.

"What is the tax with the biggest impact? That's a trick question. I think it's all of them," said Newgard.

But more than that, the cost of compliance has become more challenging. That is especially true because the rules for the regional and local income taxes are different from the state income taxes, which were changed in 2018 to collect more money from out-of-state companies.

Metro admitted its income tax rules are different than those governing state income taxes when it asked the Multnomah County Circuit Court to declare its tax legal on Dec. 29.

"The Implementing Ordinance is not 'consistent with any state law relating to' income tax implementation and administration. In other words, Metro's personal and business income tax administration and implementation does not exactly track the manner in which the state of Oregon administers and implements its personal and business income taxes. There are differences, for example, between Metro's tax laws and Oregon's tax laws with respect to income apportionment, penalty amounts, interest rates, filing statuses, exemptions and withholdings (among other areas)," Metro said in its court filing.

According to Hoan, the PBA will soon ask the court to declare Metro's proposed income tax rules illegal. Hoan said it is an opportunity to ensure Metro complies with the state rules, which could help persuade county and city officials to do the same.

A previous Portland Tribune story on Metro's court filing can be found here.

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