Could Metro’s Payroll Tax Impact Businesses Statewide?

Date: October 01, 2020

Say this for Metro, the special three-county district centered in Portland: It doesn’t think small. On November 3, it will ask voters within its boundaries in Clackamas, Multnomah, and Washington counties to vote for Measure 26-108, which would slap a 0.75% payroll tax on businesses with more than 25 employees.

According to Metro’s website, the $7 billion the measure, if passed, is expected to raise would fund safety, transit, and other transportation projects. A list of where the money would go for what Metro calls its Get Moving 2020 plan can be read here.

Metro is “the only directly elected regional government in the United States, [which] has helped shape the political, economic, social and built landscape of the Portland metropolitan area since 1979,” it says of itself on the site. “Working with communities, businesses and leaders across 24 cities and 3 counties, Metro addresses issues related to land use, transportation, garbage and recycling, parks and nature, economic development and cultural amenities.”

Metro also has the power to tax, or at least ask voters for a tax increase. The accounting firm of Moss Adams delved deeply into Measure 26-108 and reminds people it “will tax not only wages, but will include employee benefits such as health insurance, contributions to retirement, bus pass allowances, and stock options.”

Reacting to the Moss Adams report, Deanna Palm, president of the Hillsboro Chamber of Commerce, said, “This analysis proves that this tax is beyond reasonable. We know this tax goes beyond wages and includes total compensation – which includes health care benefits – and it even goes beyond Metro government’s own boundaries. And beyond that, it’s very complex.”

According to the report, the measure does not include the same clarity, limitations and exemptions as the existing payroll tax administered by Tri-Met, so even businesses and non-profits located outside Metro boundaries, but who have workers who perform work inside Metro, would be subject to the tax.

Anthony Smith, NFIB’s Oregon state director, said he was heartened by comments made by three Democratic state legislators, highlighted by the measure’s opponents, Stop The Metro Wage Tax:

  • “When the legislature was digging out of the last recession, Oregonians told me they had three priorities: Jobs, jobs and jobs. As we wrestled with policies to get people back to work, a payroll tax was considered taboo. It was never considered by democrats or republicans because it was widely seen as a tax that penalized employers for hiring people. This was exactly opposite of what Oregon needed. So, I was surprised Metro decided upon a steep payroll tax during the worse recession most of us have ever seen.” – Sen. Mark Hass
  • “Leave working people’s paychecks, health care benefits, and retirement savings alone! … Metro’s arrogant administration thinks this is the time to see if they can sneak in a new permanent tax on those people who still have a job? They want to make it harder for restaurants to stay open?” – Sen. Betsy Johnson
  • “As a State Representative serving the people of Beaverton and Aloha, I can’t remain silent as Metro seeks to create a permanent tax on labor in the tri-county area. I’m not opposed to taxes when necessary and well used. But right now our priorities need to be getting our schools safely opened, keeping our community together, and protecting jobs.” – Rep. Jeff Barker

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Related Content: Small Business News | Oregon | Taxes

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