House Committee Hears Plan to Raise Corporate Minimum

The bill is still in the Revenue Committee as House and Senate leadership continue to work on final revenue fixes.

Ginny Burdick and Phil Barnhart

(SALEM, Ore.) - The House Revenue Committee heard testimony Friday on a bill that would raise taxes on corporations in Oregon as part of what a press release from the Legislature describes as "a fair and necessary fix needed to help Oregon recover from the current economic crisis."

After announcing budget cuts of $2 billion last week, House and Senate leaders said the state will seek new revenue to help balance the state’s budget.

That new revenue would come from increasing taxes on profitable corporations and increasing the top tax rate for households making over $250,000 per year.

Senate Revenue and Finance Chair Ginny Burdick and House Revenue Chair Phil Barnhart presented a corporate tax plans to committee members Friday. The plan has several components, including increasing the state’s corporate minimum to $100, up from its current level of $10.

A second change to the corporate minimum would apply only to C-Corps which earn gross receipts over $500,000. Those corporations would pay an additional marginal rate of 0.15% up to a cap of $60,000.

For those companies paying more than the corporate minimum, the bill retains the 6.6% tax on the first $250,000 of net income. But it raises the rate to 8.2% on net income over $250,000.

Barnhart said the issue was both helping Oregon recover from the global crisis and instituting more fairness in the tax system.

“Corporations now pay less than 6% of income taxes paid in Oregon. It used to be closer to 18%. But now over 2/3rds of Oregon corporations pay the $10 minimum,” said Barnhart.

“It’s wrong for corporations that benefit from state services to pay such a low share of our tax burden. Middle income families are feeling the pinch of this economic crisis. We’re not going to raise taxes on them. But we are committed to making sure corporations pay their fair share.”

Burdick pointed out that this change was about fundamental fairness and getting Oregonians through these challenging times.

“The amount of the state’s corporate minimum hasn’t budged since 1931. Times have changed and the people of Oregon deserve fairness – especially in light of our economic crisis,” said Burdick. “We need those who are able to pitch in to step up and help. This proposal is part of a balanced approach to preserving education and the state’s other vital services.”

The bill is still in the Revenue Committee as House and Senate leadership continue to work on final revenue fixes. The Revenue chairs said they expect the Legislature will approve an increase in corporate taxes this session.

“We’ve made $2 billion in cuts to education, human services and public safety. These are cuts that will be felt by Oregonians who rely on these services, whether that be schools or health care,” said Barnhart.

“But we cannot only cut our way out of this problem. Now is the time we need to ask Oregon corporations to step forward and help their fellow Oregonians, simply by paying their fair share of taxes.”

Source: Oregon Legislature