MEDFORD, Ore. — Many businesses in Oregon are already struggling to stay open, but now they’re facing a new tax.
Oregon’s new ‘Corporate Activity Tax’ is going into effect for the first time this year and hundreds of businesses across the state are asking for it to be delayed. The tax is meant to fund about one billion dollars towards educational spending and the Student Success Act.
But with many businesses closed or struggling to stay afloat, getting charged with a new tax couldn’t come at a worse time.
“We have a lot of small to medium-sized companies that could use those dollars more right now than maybe the state of Oregon could,” Brad Hicks, Medford Chamber CEO, said.
According to Oregon Public Broadcasting, more than 400 companies signed a letter asking Governor Kate Brown to delay the tax, saying many small businesses don’t have any extra money to give due to coronavirus.
In a statement, the governor said, “It’s more important than ever to preserve Oregon’s schools and other essential services, especially for vulnerable Oregonians who have had their lives and livelihoods threatened during this pandemic. Preserving the corporate activities tax is one of the best ways to do that, and to help protect small businesses and middle-class taxpayers.”
“Many of them will not be able to afford this tax in a timely fashion. All we are asking for is a little bit of grace on behalf of those companies who may need some extra time,” Hicks said.
Governor Brown’s statement says the Department of Revenue will be flexible with businesses owing less than $10,000 in annual tax liability. If businesses cannot pay due to coronavirus and make a ‘good faith effort to cooperate’ with the department, the companies will not face a penalty.
“What we really need to do is get those dollars out into the bank accounts of Oregonians who need to buy groceries and need to pay rent and put gas in their cars,” Hicks said.
Some business owners say they’re now being forced to decide whether to pay the tax or keep paying employees.
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