Portland, Oregon area voters approve the county income tax and reject the proposed payroll tax
November 14, 2020
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On November 3, voters in the Portland area approved a tiered income tax but rejected an income tax that would have been imposed on employers in the area. Income tax is levied on Multnomah County residents and non-residents on Multnomah County income. Multnomah County is the county in which Portland is located.
Multnomah County Income Tax
Multnomah County’s Election 26-214 imposes personal income tax on the taxable income of Multnomah County residents and non-residents’ taxable income from sources in Multnomah County, effective January 1, 2021.
- Tax base: The tax applies to taxable income over $ 125,000 (single applicant) and $ 200,000 (joint applicant).
- tax rate: The tax rate is 1.5 percent on taxable income over $ 125,000 and up to $ 250,000 for single applicants and over $ 200,000 and up to $ 400,000 for joint applicants. Taxable income greater than US $ 250,000 (single applicant) and US $ 400,000 (joint applicant) is taxed at 3 percent. With effect from January 1, 2026, the property tax rate will increase to 2.3 percent and the upper limit tax rate to 3.8 percent. The move allows the County Board of Commissioners to adjust the tax rate to fully fund the program.
- Administrative rules: The measure instructs the district’s financial administrator to issue rules for implementing the tax. The rules will “generally coincide with the rules adopted by the Oregon Department of Treasury regarding Oregon Income Taxes.
- Due Date: Tax is due on the Oregon income tax filing due date, typically April 15 of the next year.
- Coordinates with Multnomah County Business Tax: Multnomah County currently has a business tax that applies to both registered and unregistered companies. The measure does not take into account the overlap between the new income tax and trade tax. However, the report by the county task force that proposed the tax recognized the need to mitigate or resolve double taxation problems that could affect “a small subset of business owners”. The report stated that the imposition of the tax would address the issue.
- New Portland Metro Business Income Tax and Personal Income Tax will also begin January 1, 2021: The new county income tax is in addition to Portland Metro income tax and business (net income) tax, both of which will also come into effect on January 1, 2021. For more information about these taxes, see our previous article.
Rejected Portland Metro Payroll Tax
Metro election measure 26-218 would have imposed a tax of up to 0.75 percent on wages on employers with more than 25 employees (excluding state and local authorities) from tax year 2022. The tax would have funded transport improvements. Tri-Met, the region’s public transportation authority, already levies a similar tax on employers in the region. The measure was largely rejected by the voters.
The content of this article is intended to provide general guidance on the subject. A professional should be obtained about your particular circumstances.
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