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Oregon Trucking Associations, Inc.
Oregon Truck Dispatch
BOB RUSSELL
OTA Vice President/
Government Affairs
LEGISLATIVE UPDATE
BY NOW, I’M SURE YOU ARE ALL AWARE OF
MEASURE 97 (M97)
—the mother of all corporate tax
increases. For those of you that are not familiar with the
details, M97 is a ballot measure that, if passed in November,
will implement a $3 billion per year tax increase on C-Corps
with gross revenues exceeding $25 million per year. For
companies that fall into this category, they will pay $30,001
on the first $25 million of sales and 2.5% on sales above that
amount.
According to the Legislative Revenue office, the tax will act
more like a sales tax rather than a traditional gross receipts
tax because sales will be taxed at all levels in the distribution
chain. For example, gasoline sold by a major oil company to a
wholesaler will be taxed as well as the wholesaler’s sales to a
retailer and then the retail sale to the consumer—as long as
the companies involved are C-Corps and have gross revenues
in excess of $25 million. Given this example, the effective tax
rate could be as high as 7.5%.
While there are relatively few taxpayers that will be required
to pay the tax, it will impact Oregon’s entire economy and
obviously, not in a good way.
For those companies that are impacted it will increase the
cost of goods and those costs will be passed on to you. Many
of the products and services you buy will be impacted, and
the cost of doing business in Oregon will rise.
OTA and the broader business community strongly oppose
M97. If you are interested in participating in the campaign to
The Impacts of
M97
oppose it, please contact either Jana or me and we will get
you connected with the campaign staff.
So, the next question is how could M97 impact
transportation funding in the event that it passes or that it
fails? The best outcome for funding our highways, streets
and bridges is if M97 passes in November. The reason is
because Article IX of the Oregon Constitution requires that
all taxes on motor vehicle fuels and the ownership,
operation, or use of vehicles shall be deposited in the State
Highway Fund. This will raise hundreds of millions of
dollars for roads. Exactly how much is not clear at this time.
The Legislative Revenue Office is currently working on an
estimate that will be used in the Cost Allocation Study if the
measure passes.
Certainly, the majority of these revenues will be raised from
the sale of gasoline and automobiles. This will require an
additional increase in truck taxes in order to balance the
books between light and heavy vehicles as required by the
Constitution. While our roads will benefit, Oregon’s trucking
industry will not. Trucking companies located out of state
will be able to avoid the additional taxes on the fuel and
trucks they buy. However, everyone will suffer from the
dampening effect this tax will have on Oregon’s entire
economy.
So, what happens if M97 fails? To some degree, this depends
on whether or not the Democrats pickup more seats in the
Oregon House. Let’s look at the different scenarios. In all