Oregon tax bill HB 2116 could threaten the survival of low income workers by adding an extremely restrictive compliance rule that would impact tens of thousands of occupational licenses holders.
Oregon is rated as one of the worst states for occupational licensing and the legislature is considering a tax bill that will make it even worse.
According to the Institute for Justice, 58 percent of low-income occupations have some sort of licensing requirement. For example, Oregon requires 140 days of training to become a manicurist. Cosmetology licenses in Oregon currently require seven additional months of training compared to the same license in Massachusetts.
HB 2116 makes tax compliance a licensing requirement. This would disqualify workers who have tax problems. Everyone with an occupational license—manicurists, cosmetologists, real estate agents, lawyers, teachers—must “demonstrate” compliance with Oregon’s tax laws before they get their license or when they renew their license. And, if the state determines someone is out of compliance, that person’s license can be revoked, meaning they can’t work in that occupation under HB 2116.
Those most likely to be out of compliance are struggling low-income workers who don’t have the resources to hire an accountant and may not have ability to navigate Oregon’s complex business and payroll tax environment. Under HB 2116, a simple mistake on a tax form or difficulties in paying an unexpectedly large tax bill can result in the loss of a job or an entire business.