Darrah: Unfair taxes put local business under at a time of need
A week ago, my wife and I owned the rural community pharmacy in Banks that we had run for 15 years. Even though COVID-19 made it a potentially dangerous place for our staff to interface with sick patients, we knew it was important to serve our community during this frightening time.
Now, it's all gone. We transferred our prescriptions to Safeway in Forest Grove and laid off our six employees, and for the next few weeks, we will sell the remaining items on our sparse shelves.
Our locally owned independent business is now just another statistic of a small, local business being strangled by unreasonable new taxes that politicians told us that only big corporations would pay. Their slick marketing worked, and now we're paying the price.
Last year, when state government had more money than ever before, the politicians still passed a new $2 billion tax on Oregon sales. It taxes the medications we sell to patients. We knew it would be hard to swallow, but we thought we could increase prices on other items and maybe continue to make payroll. Our daily prescription drug orders ranged from $10,000 to $50,000. Third-party negotiators for insurance companies who contract with pharmacies often reimburse us for less than the cost of the drug. Our sales were high, but our profit was very low. We've been operating at a loss for two years and made -$40,000 in profit last year, up from the -$120,000 loss from the year before, when we laid off one of our pharmacists last year.
The nail in our pharmacy's coffin was the new tax on Oregon sales. Taxing a business on their sales, even if the business isn't making a profit, is just wrong. I don't care if you're a Democrat or a Republican, but that's just wrong.
We looked at the $10,000 tax bill that we would have owed the state on April 30 and decided to close instead. There is no way that we could have continued to pay the tax bill each quarter and make payroll. So, our people lost their jobs. I am now a staff pharmacist behind the counter at the Safeway in Forest Grove.
It's too late for us, but Gov. Kate Brown and lawmakers have a chance to give other business owners a chance to keep their people employed. I'm asking business owners and their employees to join me in demanding that Oregon lawmakers pause the new tax on Oregon sales that is due on April 30. Local businesses that have shuttered and sent all their employees home will still be forced to pay this new tax, too. They're not making a dime right now. It's just wrong.
Gov. Kate Brown and most Oregon politicians have ignored us completely. Even during this COVID crisis, most Oregon politicians refuse to suspend the new tax on Oregon sales that we are being forced to pay when we simply cannot afford it. But of course, the same rules don't apply to the politicians.
Oregon state government has done next to nothing to keep people employed. They're only offering benefits to people who've already lost their jobs. Halting this tax is one simple thing they can do to protect family paychecks. Business owners who are fortunate enough to continue operating are looking desperately for ways to reduce the cost of staying in business and keep people employed. They're still being forced to pay all kinds of state taxes and fees like the statewide payroll tax to fund transit. Only the federal government has provided some tax relief to business owners.
If that's not bad enough, Gov. Brown announced recently that she's asking schools to stop plans to spend the new tax money. So, if business owners are forced to send the first payment on April 30, the money will be swallowed up by general government expenses — it won't even go to schools.
Oregon politicians have done next to nothing to tighten state government's belt during this crisis. They haven't suggested a hiring freeze, a stop to government employee raises or even suspending their own salaries. They're making everyone else pay more except themselves.
Politicians who refuse to halt the new tax on sales are guilty of putting people they represent out of work. Our state economy's blood is on their hands. Halt this tax now.
Phil Darrah is a longtime pharmacist who owned and operated Banks Pharmacy from 2005 to 2020. He lives in Banks.
You count on us to stay informed and we depend on you to fund our efforts. Quality local journalism takes time and money. Please support us to protect the future of community journalism.