A dramatic turn of events last night. At the 11th hour, Oregon Business & Industry testified to their neutrality on a gross receipts tax that will levy over $2 billion in new taxes on all businesses with sales above $1 million. The committee became nearly jubilant and proceeded to pass HB 3427 on a party-line vote with 10 democrats supporting and 6 republicans opposing.
Here are the specifics of the legislation:
- Tax rate of 0.57% on Oregon sales above $1 million;
- 35% deduction for labor or business inputs;
- An exemption for receipts from sales to a wholesaler or ag cooperative for any sales outside of Oregon; and
- An exemption for groceries (defined as those that qualify for ‘SNAP’).
The reason that the tax bill changed since yesterday is that HB 3427 is now part of a negotiated package that will also contain:
- A new paid family leave program that will include a 37% employer / 63% employee cost share. Details are not yet defined.
- A PERS reform proposal that is yet to be defined (although we understand we will be learning more details this week).
- HB 2269 (employer health care tax) will die.
- Cap & Trade (HB 2020) will be negotiated separately and is not part of the deal.
OSCC has yet to take a position on the terms of HB 3427 or the rest of the package.