Portland Considering Weight-Mileage Tax Surcharge
posted in Blog by Brian Gray
On May 4, 2016, the city council of Portland, Oregon, is scheduled to consider the imposition of what it calls a “temporary heavy vehicle use tax,” to raise funds to maintain city streets. Some business groups opposed Commissioner Novick’s idea of charging a surcharge on the Business License tax.
So now, Novick is proposing a 2.8% surcharge on your total weight mile tax paid to the State for those companies with a Business License in Portland (2.8 percent of a taxpayer’s annual liability under Oregon’s weight-mile tax, the nation’s highest truck tax). For example, if you pay the State $10,000 in weight mile taxes, then your payment to Portland would be $280. This amount would be paid on your Portland Business License Tax return.
The city truck tax would parallel the imposition of a local gasoline tax, which Portland citizens will vote on later next month, on May 17; but information put out by the city transportation agency indicates that truck tax would go into effect even if the gas tax is voted down.
If the city council approves the surtax proposal, things will be interesting, since not only will a motor carrier’s liability for the tax not be apportioned according to the amount of its business in Portland, as opposed to the rest of the state, but collection of the tax will depend on carriers holding a city business license.
The Oregon Trucking Associations president Jana Jarvis said in an email to OTA Members, “Clearly, the Commissioner is looking at the weight mile tax surcharge as a safety net for a gas tax that could potentially fail when put to a public vote. In reality, this is simply a $10 million money grab from the trucking industry.”
The city believes it can require such a license of any carrier picking up or delivering freight locally, but this is highly questionable under a long string of decisions by the U.S. Supreme Court.
For those of you that missed previous updates on this topic, Portland’s Business License Tax is essentially an income tax on every business operating in Portland whether or not the business actually has a physical location in the City. For trucking companies, whether intrastate or interstate, if you pickup or deliver in Portland you are subject to this tax. Many of you may not be paying this tax today, as the evasion rate is high. However, the City has indicated that they will significantly increase enforcement if this proposal moves forward. So, for those of you that are not paying the Portland Business License Tax today, you will have to pay this tax in addition to the surcharge on your weight mile tax.
A public hearing is scheduled for Wednesday, May 4th at 3:15 pm where commissioners will have the opportunity to hear from the trucking industry. The hearing will be held at Portland City Hall on the 2nd floor in the Council Chambers.
If you have any questions, please call Jana Jarvis at the OTA at 503-522-5902 or email at jana@ortrucking.org
