Portlandís Measure 26-201 Will Have Statewide Impact

Published Thursday, October 11, 2018

 

Only two years after the resounding defeat of Measure 97, Portland voters are being asked to approve a new gross receipts tax. Measure 26-201 creates a one percent gross receipts tax on businesses selling goods and services within the City of Portland. While supporters claim the tax will be paid by businesses, these taxes are often passed on to consumers in the form of higher prices. 

Measure 26-201 expands the traditional understanding of retail sales to include most services. 

“Retail sale includes but is not limited to the sale of services, including but not limited to retail banking services.” [Measure 26-201, Section 3 (16)]

This means everyday essentials such as cell phone service, internet access, transportation, and insurance will cost more, not just toothpaste, gas for the car and flooring from a big box hardware store. The tax explicitly applies to banking services, something not found in any other definition of retail sales. Measure 26-201 will add costs for all business, not just big retailers directly subject to the tax. Small businesses will get hit two ways—through the purchase of goods, such as office supplies; and through service they require, such as phone services, internet, insurance and, of course, banking.

Oregon Business & Industry (OBI) supported the defeat of Measure 97. Measure 26-201, while currently limited to the City of Portland, could have statewide implications. First, it could set a precedent for other cities to follow, spreading a new gross receipts taxes across the state over time. Second, although the new tax only applies to businesses with $1 billion or more in annual global sales and $500,000 or more in annual sales in the City of Portland, it will impact nearly every business in Portland, as they are purchasing goods and services from larger businesses hit by the new gross receipts tax.

To learn more about the measure, click here.

Watch for an article in next week’s issue on other key measures OBI is tracking in the upcoming November elections.