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Bills Increasing Corporate Minimum Tax Introduced

January 29, 2009

By John Marshall
Associated Oregon Industries
Oregon’s largest business association

Even though the 2009 Legislative Session convened less than two weeks ago, already two bills proposing to increase the $10 corporate minimum tax have been introduced.   HB 2119, introduced at Governor Kulongoski’s request, imposes the new minimum tax on C-corporations only and bases it on Oregon sales.  The new minimum is bracketed as follows:

Although the bill directs the proceeds of the higher corporate minimum tax to the state’s Rainy Day Fund, the governor declared in his state-of-the-state address that he now wants the proceeds – estimated at close to $85 million – to fund college scholarships.

HB 2070, introduced by the House Interim Revenue Committee, proposes to replace the current $10 corporate minimum tax with a New Hampshire-style business activity tax.  Under this proposal, a minimum tax would be imposed on C-corporations at a rate of 0.2 percent of the corporation’s “enterprise value tax base,” defined as the total of the corporation’s employee compensation, interest and dividends.  Corporations with less than $100,000 in gross receipts would be exempt from this new minimum tax.

Under both bills, a C-corporation would pay the greater of its current-law corporate income and excise tax liability or the new minimum tax.

AOI’s board-adopted policy position supports an increase in the corporate minimum tax from $10 to $300, but does not support a tax increase on business as substantial as either proposed by HB 2070 or HB 2119.  AOI will therefore oppose both bills.

— To support or learn more about Associated Oregon Industries go here.

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Discuss this article

Trevor January 29, 2009

And what are businesses getting for this money?

Bud January 29, 2009

Talk about bad timing.

repeater January 29, 2009

They say in defense that this tax has not been raised since the twenties. Well, maybe there is a reason for that. Did anyone think about that? That is suppossing that no other tax has been raised on our local stores for the past 90 years. Let us get real here.

Charlie March 2, 2009

Think about it. Just because a corporation has sales doesn’t mean it is profitable. So a corporation can have slightly over $1 million in sales, have a loss of $200,000 and still have to pay the $5,000 minimum tax. The tax also penalizes corporations that have high volume sales, but operate on a thin profit margin.

Brandon December 9, 2009

So the gap between the rich and poor grows, and that’s cool. But goodness! Raise the corporate tax from $10, and everyone goes ape****. Gotta love “conservatives” so paranoid of government controlling them that they ignore the fact that business already control us, and with much less oversight than an elected government. Love it.

Amy January 7, 2010

Cry me a river. I pay almost $5000 a year to the state of Oregon and I work retail, rent a house and live paycheck to paycheck most of the time. I am more than happy to pay my share knowing that it’s taxes that keep our state in business. It’s time to pay up. And furthermore, if you have over a million dollars in sales are still aren’t profitable, you need to find a new line of work.

mel January 12, 2010

What are businesses getting for this?

The same thing everyone else gets. Education, health care, and public safety.

And I must agree, if you’ve got 20% losses on $1 mil of sales, you’re already bleeding so much this tax won’t make any difference. It won’t be the thing that tips you into Chapter 11, but you might be well on your way anyway.

Craig February 4, 2010

Should be based on net income, not gross.

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