Are we headed back to the bad old days when big corporations paid $0 in Oregon taxes?
For more than seven decades, Oregon had a corporate minimum tax of just $10. That was a small sum in the 1930s; never adjusted for inflation, this $10 corporate minimum tax was an embarrassing reminder of just how much big corporations doing business in Oregon had gotten off the hook.
But in 2010, Oregon voters passed—by a wide margin—a ballot measure that established a $150 corporate minimum tax for most corporations, and a tiered tax structure for bigger corporations based on in-state sales. Even for these much larger corporations, the minimum tax amounted to approximately one-tenth of one percent (or less).
The idea was that there should be a minimum tax that even big corporations pay, regardless of the many tax loopholes the state hands out. Even under this law, Oregon still has the lowest business taxes in the country.
A new ruling (pdf) from the Oregon Supreme Court, however, has revealed some holes in state laws that could take us back to the bad old days when the largest corporations are able to pay nothing in corporate state taxes.
The Court’s decision, released last Friday, found that state law allows corporations to use certain tax credits (like the massively controversial Business Energy Tax Credit) to completely wipe out their tax liability, including even their minimum tax payment. That means that a corporation with, say, $80 million in Oregon sales could have a corporate tax bill of $0.
Research is still ongoing to determining how much revenue for schools, senior services and public safety could be lost by this development. But this only goes to prove the case that Oregon’s corporate tax laws are riddled with loopholes that allow big businesses to get away with paying next to nothing in taxes.
Clearly, we need much stronger laws governing the corporate minimum and various tax credits so that we can make sure big corporations are paying their fair share, not benefitting from our state and then leaving the rest of us to pick up the tab.