The Oregon Business Association’s tax flip-flop

Chuck Sheketoff

It was 2009. The Great Recession had hammered Oregon’s finances.

The Oregon legislature faced a choice. It could slash the state budget. That meant laying off more teachers, cutting services that protect foster kids, and weakening many other essential public structures that Oregonians depend on. Or the legislature could raise taxes.

When it came to raising taxes, one target stood out: Oregon’s ridiculously low corporate minimum tax. Stuck at a measly $10 since 1931, the corporate minimum tax was too big an embarrassment even for the business community. So instead of trying to defend the indefensible, the Oregon corporate lobby stepped forward with a couple of tax proposals.

One business coalition, led by Associated Oregon Industries (AOI), proposed a flat minimum tax on all corporations — C-corporations and S-corporations alike. AOI’s plan called for a minimum tax of $300 a year, regardless of a company’s profits.

Another group, the Oregon Business Association (OBA), recommended a different minimum tax structure (PDF). OBA proposed charging S-corporations a flat $250, no matter the level of sales or profits. And for C-corporations, OBA proposed using a sliding scale starting at $250 a year and capping at $25,000 based on the corporation’s in-state sales, not profits. In other words, OBA put forward a tax on gross receipts.

The legislature took OBA’s concept and tweaked the details. For S-corporations, the legislature set the minimum tax at $150, less than what AOI and OBA had proposed. And for C-corporations, the legislature established a minimum tax on a sliding scale, starting at $150 and going up to $100,000 for corporations with $100 million or more in Oregon sales.

Opponents to the legislature’s tax plan referred the issue to the ballot, which became Measure 67. AOI came out swinging against Measure 67. But OBA, which put forward the gross-receipts concept that treated S- and C corps differently, stayed on the sidelines.

Oregon voters overwhelmingly approved Measure 67, in spite of a barrage of misinformation put out by the business community.

It’s important, however, to recognize just how modest the corporate minimum tax put in place by Measure 67 is. The tax ranges from 0.15 percent for corporations with $10 million in sales) to less than 0.1 percent (one one-tenth of one percent) for corporations with have sales over $100 million. The more that the sales exceed $100 million the lower the tax rate.

Today, as the chronic underfunding of Oregon schools persists and the state is unable to address the needs of Oregonians, that minimum tax is once again on the table. Measure 97 has the potential of transforming Oregon schools, health and senior services, boosting the business climate and quality of life in our state. Measure 97 would amend the minimum tax, raising taxes only on C-corporations with Oregon sales above $25 million per year, and only on the sales that are above that big business threshold. No small business will pay the updated minimum tax.

This time around, OBA is not staying on the sidelines. OBA is leading the campaign against Measure 97, railing against a tax concept it once proffered.

What explains OBA’s flip-flop, going from proposing a gross receipts tax and treating C-corps differently, to maligning the concept? Maybe it’s that intellectual consistency goes out the window when corporate behemoths face a real tax increase. Right now large corporations like Comcast, Walmart and Bank of America see the current capped minimum tax as nothing more than a pittance. They know that Oregon has the lowest business tax level in the nation, and they want to keep it that way.

Measure 97 is a tax corporations cannot dodge. By voting “yes” on Measure 97, Oregonians will finally make big corporations pay their fair share.

Oregon Center for Public PolicyChuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at

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