The question is not so much if there will be a special session of the Oregon Legislature but when. Legislators will undoubtedly take action on the state’s reaction to the new coronavirus.
They should also debate the kicker refund and the corporate activity tax.
Families and businesses will feel the impacts of COVID-19 in their wallets. Some people will not be able to work. Some businesses may fail. And while the federal government may come through with some help, the state legislators need to debate what they can do.
State Rep. Cheri Helt, R-Bend, has put one idea on the table: Legislators could change how the kicker refund gets returned to taxpayers. Her idea is to switch it back to a tax refund check — and Oregonians would get it by Memorial Day.
Oregon’s kicker law is well — unusual. State law requires the state to refund the full amount of excess revenue to taxpayers when general fund revenue exceeds the forecasted amount by more than 2% for a biennium. That money is now returned through a tax credit on odd-numbered year returns. If you want to find out how much you may get back, you can go oregon.gov/dor and click on “What’s my kicker?”
“State government is sitting on $1.6 billion of Oregonians money that will do more good in the hands of families than stashed away in a Salem vault,” Helt said. “The Legislature should lead now to help families and small businesses weather this financial storm.”
Then there’s the corporate activity tax. It will raise about $1 billion a year for schools, which is nice. It has had, though, an interesting implementation.
All that money must come from somewhere. The Legislature chose to levy the tax on businesses. The tax “shall equal $250 plus the product of the taxpayer’s taxable commercial activity in excess of $1 million for the calendar year multiplied by 0.57%.” There are several complications. The rules for the tax are not even finalized. The way the tax is written will allow taxes to be paid on taxes. And here’s the kicker — so to speak — businesses must pay the tax even if they are not profitable.
So as the economy sputters due to the impact of the coronavirus the state is going to do some piling on — unless — unless legislators do something about it.