The Billups Company CPA's, Inc.

Oregon Measure 67 recently passed, increasing business taxes retroactively for years beginning on or after January 1, 2009. Here are the key provisions.

The measure increases the minimum tax for S Corporations from $10 to $150. In addition, it imposes a new minimum tax on partnerships, limited liability companies (LLC), and limited liability partnerships (LLP) of $150.

The effect on regular, C corporations is two fold. First, it creates a new marginal tax rate on Oregon corporate taxable income. Under prior Oregon law all corporation income was taxed at 6.6%. This measure imposes a new tax rate of 7.9% on income in excess of $250,000.

The second way corporations are affected is by the creation of a new corporate minimum tax which is based on gross income. The minimum tax ranges from $150 on C corporations with gross income of less than $500,000 to a minimum tax of $100,000 on companies with gross sales of $100 million or more.

The passage of this measure creates the unusual situation where a profitable Oregon company could end up paying less taxes than a larger company that’s losing money. It is no wonder that the Cascade Policy Institute forecasts the loss of 70,000 Oregon jobs as a result of this tax increase (Fruits & Pozdena, 2009).