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CORPORATE / INDIVIDUAL INCOME TAX BALLOT MEASURES ELECTION DATE: JANUARY 26, 2010 LEGISLATIVE REVENUE PACKAGE ‘FLASH CARD’ FACTS
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Along with reducing the state budget, the 2009 Oregon Legislature passed two bills that would increase some corporate and personal income taxes. What is the revenue package? #1
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These bills are expected to raise $733 million in revenue, which is included in the 2009-11 state budget to prevent further cuts to schools, healthcare and public safety. What is the revenue package? #2
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Legislative actions taken to fill the projected 2009-11 state budget gap of $4.028 billion were: Budget Cuts$1.994 billion Federal Stimulus$978 million Additional State Revenue$801 million State Reserves$255 million What is the revenue package? #3 Source: Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 5, September 2009
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The legislature has set a January 26, 2010 election date. A yes vote will confirm the legislature’s passage of the bills. A no vote will prevent the bills from becoming law. When is the vote? #4
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For 97.5% of Oregonians – single people making less than $125,000, or couples making less than $250,000 – personal income taxes would not change. How would personal income taxes be affected? #5 Source: Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 12, September 2009
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For individuals with annual incomes above $125,000 or couples with annual incomes above $250,000, it raises the state income tax rate by 1.8%-2.0% – but only on income above those amounts. How would personal income taxes be affected? #6 Source: Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 7, September 2009
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1. Corporate Income Tax: Corporations would pay an additional 1.3% on profits over $250,000 in 2009 and 2010. That would be reduced to 1.0% in 2011 and 2012. Starting in 2013, the additional tax will be reduced to 1.0% on profits over $10,000,000. How would corporate income taxes be affected? #7 Sources: HB 3405 and Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 12, September 2009
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2. Corporate Minimum Tax: Two-thirds of corporations doing business in Oregon now pay an annual minimum tax of $10. This bill would raise the corporate minimum tax to $150 for corporations with revenues of less than $500,000. Those with revenues of more than $500,000 would pay about one one-thousand th of their Oregon revenues in taxes. How would corporate income taxes be affected? #8 Sources: Oregon Corporate Excise and Income Tax”, 2008 Edition, Oregon Department of Revenue, pages 3-14 and Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 12, September 2009
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Oregon’s business taxes are currently at 3.7% of gross state product, which ranks 3 rd lowest among the 50 states. If the revenue package would be affirmed by voters, Oregon’s corporate taxes would go up to 3.9% of gross state product, which would rank as 5 th lowest. How do Oregon’s business taxes compare? #9 Sources: ”Total State and Local Business Taxes,” Council on State Taxation, Ernst & Young, 2009 and Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 18, September 2009
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By comparison, Washington’s corporate taxes are at 5.5% of gross state product, California and Nevada at 4.6%, and Idaho at 4.7%. How do Oregon’s corporate taxes compare? #10 Source: ” Total State and Local Business Taxes,” Council on State Taxation, Ernst & Young, 2009
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Of the $733 million raised by the revenue package, about 40% – some $285 million – would be targeted for schools. This amount would be included in the $6.0 billion allocated to schools for 2009-11. What would this mean for Oregon’s schools? #11 Source: ” 2009-10 Distribution of Formula Revenue to Districts,” Oregon Department of Education
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[Your information here] What would this mean for local schools? #12
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