Article | June 28, 2024 | Authored by KDP LLP
Oregon’s economy finds itself on the brink of a significant shift with the introduction of a proposed new corporate tax currently circulating for voter’s consideration on the November 5, 2024, ballot. Oregon Initiative Petition 17 outlines the terms of a 3% tax on corporate gross sales exceeding $25 million, effective January 1, 2025. This new tax, affecting both C corporation and S corporations alike, would be layered upon the existing corporate minimum tax regime and have profound implications for businesses operating within the state and the population.
Purpose and Revenue Allocation
Proponents of IP-17 project that the new tax could generate around $3 billion annually, which would be used to fund rebates for eligible Oregon residents. They estimate that each Oregon resident would receive a rebate of approximately $750 from the revenue raised.
Reach
The new tax would be particularly impactful for affected business in industries characterized by high gross sales and substantial costs of goods sold (COGS), including sectors like farming, manufacturing, wholesale distribution, and certain retail segments. Such a surcharge would burden businesses already operating on tight margins, where profits are reinvested in infrastructure, workforce development, and technological advancement.
Conclusion
Sufficient signatures had been submitted as of today for the measure to be on the November ballot, assuming enough of those are verified. We will continue to monitor the measure’s progress and release updates on significant future developments.
References
KDP is a team of CPAs and business advisors with a local focus, but a national reach. We have offices in Medford, Oregon and Boise, Idaho, as well as satellite offices throughout the United States. We have been providing professional tax, accounting, audit, and management advisory services since 1976, serving clients nationwide. Our firm has more than 90 trained professionals on staff dedicated to furnishing high-quality, timely and creative solutions for our clients.
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