A gross receipts tax would hurt Oregon’s small businesses (Guest opinion)
Oregonians need to know about some lawmakers’ plans to balance the state budget on the backs of small and homegrown Oregon businesses. State Sen. Mark Hass’ latest plan to tax Oregon sales is even worse than Measure 97, and his homework appears to be “lazy” and “amateur” — they very words he used to describe efforts to educate the public about this hidden sales tax proposal.
In recent comments in the Oregonian, Hass lamented the fact that big corporations are finding ways to dodge income taxes, so he wants to eliminate the corporate income tax all together and replace it with a tax on their sales in Oregon. The problem is, some national and international corporations could benefit from his proposal, while homegrown companies like ours would get stuck with the bill.
The vast majority of Oregon businesses like mine aren’t big corporations and we pay business taxes through our personal income tax instead of the corporate income tax. Then we would get a new tax on our sales, whether or not we make a profit.
Under Hass’ plan, our family business would now be double taxed — once on our sales to Oregonians and again when we pay our personal income taxes. And we would pay all the increased costs from our suppliers who would also be taxed on their sales. Meanwhile, we would continue pay thousands each year in property taxes, payroll taxes, federal taxes, permits, fees, and dozens of government payments we make.
Here’s how his latest proposal would directly impact our family business. We are facing a potential tax of at least an additional $7,000. While that might seem pretty straightforward, it isn’t. In order for us to cover this additional tax liability, we would have to generate more than $28,000 in sales to cover it. This tax would eat the equivalent of 8 days of our small restaurant’s revenue. This would be in addition to many other government-mandated cost increases.
We are worried about the next huge jump in minimum wage and the additional costs that will trickle down to us as a result of that (i.e. Our distributors/suppliers will raise their prices on the products we buy from them to run our business.) That is just one of the multiple financial hurdles we are looking at facing. We are a family business that employs 26 people in our local community, we purchase as locally as possible to keep our dollars with other family businesses, we host and participate in a variety of charity events, and try to be good stewards in East County. By strapping us down with additional taxes, in a business that doesn’t have big margins to begin with, it makes it difficult for us to keep our prices at a point that are reasonable to our customers. Those costs would eventually be passed along to Oregon consumers in the form of higher prices — just like a hidden sales tax.
Our state government’s $1.6 billion budget gap is not because we’re lacking money. I’ve read that we have more than $1.5 billion more tax revenue this biennium. That’s more than almost any other state, and the government is bringing in more tax money than any other time in state history. Just like our family and our business, Oregon government must live within its means.
Sen. Hass and other proponents of a tax on sales want to finance their out-of-control spending habits on the backs of Oregon small and medium-sized businesses. We must speak up and oppose this thinly veiled plan to make us all pay more. Increasing taxes on Oregonians and our local small businesses should always be the last option and never the first.
Stayce Blume is the president-elect of the Gresham Area Chamber of Commerce and Owner of the Skyland Pub in Troutdale.