Oregon Adds New Tax on Business Receipts Over $1,000,000

By: Eric Tweed, Business & Taxation Law Attorney

On May 15, 2019, Governor Kate Brown signed into law House Bill 3427, which enacts a tax on business receipts for the purpose of funding various educational initiatives.  With a few exceptions, beginning on January 1, 2020, all businesses that have $1 million in receipts attributable to Oregon will be subject to this new tax.  A few key points are as follows:

  • The tax imposed will be $250 plus .57% of all commercial activity in excess of $1 million;
  • There is no tax on commercial activity under $1 million;
  • Business can subtract 35% of the greater of the cost of inputs or labor costs;
  • Receipts from the sale of groceries, and motor vehicle fuel are not considered when computing the commercial activity of business; and
  • The tax is imposed on the Seller and is assessed regardless of a business’s profitability.

The full text of the bill can be read here: https://olis.leg.state.or.us/liz/2019R1/Downloads/MeasureDocument/HB3427/Enrolled. Attorneys here at Saalfeld Griggs are here to assist if you have any questions about the applicability of this new tax to your business.

Eric Tweed is an associate in the Business & Taxation Law practice group and a member of the Dental Practices Team. The information in this article is not intended to provide legal advice. For professional consultation, please contact Eric Tweed at Saalfeld Griggs PC.  503.399.1070.  etweed@sglaw.com  © 2019 Saalfeld Griggs PC