Rare bipartisan unity against 17% small business tax

Photo: Minority owned small businesses trying to compete with big box retailers will be hit hard by the 17% tax.
By Oregon Small Business Association

It is not often enough that Democrats and Republicans unite against an idea but the 17% tax on small business has become one of them. SB 139 is a $50 million tax on small business that only hits businesses that are family owned like LLCs and Partnerships. Oregon’ smaller family businesses, like restaurants, family farms will be hit hard.

The rate of taxation for family-owned small businesses was set in 2013 by Democrat and Republican lawmakers working with then Governor John Kitzhaber. That small business tax rate was further reinforced and expanded by Governor Kate Brown in 2018. That very same tax rate that Governor Brown protected and expanded with the 2018 Special Session is now being threatened to be dismantled as SB 139 is before her desk awaiting her critical signature or veto decision.

What makes it more difficult for raising taxes on small business during a pandemic is the fact that on the same day the Senate voted on the small business tax, the same Senators voted for SB 727 which created a narrow tax credit allowing Oregon’s richest to get a massive tax break against their federal income taxes. Raising taxes on small businesses while handing out tax breaks for Oregon’s highest income earners is a terribly unpopular idea among voters of all persuasions.

Despite bipartisan opposition there were enough Democrat lawmakers favoring big business interests and higher taxes, so SB 139 passed both chambers and is before the Governor’s desk. The very Governor that called a special session to protect the small business tax is now being cornered into raising taxes on the same small business.

For more information on the SB 139 and where it stands go here.