NEIGHBORHOOD STORE ASSOCIATION
Vol. 5 No. 1
Measure 30 is not just a “Temporary” Tax Increase. The senior medical deduction, property tax discount reduction, corporate foreign income, sport utility vehicle (SUV) depreciation and the corporate minimum tax are permanent tax increases.
1. Imposes a graduated personal income tax surcharge for tax years 2003 & 2004. (See Chart )
| GRADUATED PERSONAL INCOME TAX SURCHARGE | ||
| Surcharge is a percentage of taxpayers’s income tax liability. | ||
| Single | Surcharge | Joint or Head of Household |
| Below $10,000 | 0% |
Below $20,000 |
| $10,000–$19,999 | 1 % | $20,000–$39,999 |
| $20,000–$24,999 | 2 % | $40,000–$49,999 |
| $25,000–$29,999 | 3 % | $50,000–$59,999 |
| $30,000–$34,999 | 4 % | $60,000–$69,999 |
| $35,000–$49,999 | 5 % | $70,000–$99,999 |
| $50,000–$69,999 | 6 % | $100,000–$139,999 |
| $70,000–$89,999 | 7 % | $140,000–$179,999 |
| $90,000–$119,999 | 8 % | $180,000–$239,999 |
| Above $120,000 | 9 % | Above $240,000 |
Measure 30 is expected
to generate $856 million
in personal income
taxes in three years.
The tax surcharge will continue during 2005, unless the
projected ending balance of Oregon’s General Fund is greater than 4% of the
General Fund appropriations for the 2003-05 biennium.
2. Extends the sunset date on the 10¢ per pack cigarette tax to January 1, 2006. The 10¢ tax was implemented for a two-year period in 1993 to benefit the Oregon Health Plan and was extended during each subsequent Legislative Session.
3. Modifies the Oregon special medical expense deduction by adjusting the minimum age requirement from 62 to 65 years old and phases-out the deduction for higher income taxpayers beginning in tax year 2003. (Permanent tax change)
4. Eliminates expense deductions or depreciation allowable for certain SUV vehicles (4-wheeled vehicles weighing 6,000–14,000 pounds), with certain exemptions for vehicles used primarily in farming, timber or wood-products industries and certain vehicles used in construction. Applies to tax years beginning on or after and to property placed in service on or after January 1, 2003. (Permanent tax change)
5. Requires extraterritorial corporate income to be added back to a corporation’s Oregon taxable income, beginning in tax year 2003. (Permanent tax change)
6. Reduces the allowable tax credits to a corporation by 20% for 2003, 2004, and 2005, except in certain circumstances related to housing. Allows unused tax credits to be carried forward for three tax years beginning in tax year 2006.
7. Increases the corporate minimum tax by eliminating the $10 minimum and
replacing it with a graduated minimum tax dependent on the corporation’s amount
of Oregon sales, beginning with tax year 2003. Increases Oregon C Corporations
minimum tax to range of $250 to $5,000, depending on sales. Increase Oregon S
Corporations minimum tax to $250 to $500, depending on sales. (Permanent tax
increase)
8. Reduces the deductions for dividends received by corporations from 70% to 35% for tax years 2003, 2004, and 2005.
9. Prohibits the Dept. of Revenue from assessing penalties on individual or corporate taxpayers for underestimated taxes in 2003 due to the tax changes.
10. Reduces the property tax discount rate for payments made before November 15 to 1.5%, beginning with tax years 2004/05. The 1.5% discount will only be allowed for payments in full. (Permanent tax change)
11. Authorizes a nursing home provider tax and transfers $6.25 million of the new revenue to the General Fund in FY 2003/04 and 2004/05. The provider tax sunsets on January 1, 2008.
12. Imposes an assessment on each prepaid managed care health services organizations
(MCO) at a rate of 6% of MCO premiums. This assessment sunsets on
January 1, 2008.
Legislative Tax Increase Proposal
Goes to the Voters on February 3
Oregon’s Minimum Wage Increases to
$7.05 on January 1st
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