Portland City Council approves business reform ordinances to help modernize tax code
Sep 30, 2022 - 07:21 AM
On Wednesday, September 29, 2022, Portland City Council approved a pair (1) (2) of ordinances aimed at improving the local service-related business environment. These measures modernize and streamline how the City of Portland collects revenue for service-related businesses.
These ordinances will modernize the outdated way Portland currently taxes businesses income and will benefit businesses that service clients outside the city. This change in apportionment will no longer collect taxes where the services are performed, rather Portland will collect revenue based on where the service benefits the customer.
“This is a helpful step in the right direction that will help correct an unanticipated penalty impacting local businesses that have—on some occasions—prompted them to leave the city,” said Mayor Ted Wheeler. “Today’s passage signals a win towards revitalizing our business community and making our businesses more competitive.”
It is noteworthy that these ordinances deliver relief to local businesses without reducing the tax rate or sacrificing the city’s tax revenue. The reforms will help the City of Portland retain businesses, as it will dissuade employers from moving outside of the city to take advantage of lower taxing jurisdictions. Furthermore, this policy shift will drive new investment in the local economy, as employers will want to expand their businesses locally.
“The changes to city tax rules and methods championed by Mayor Wheeler and approved unanimously by the council today will help advance Portland’s recovery from the COVID-19 pandemic. By aligning with the State of Oregon and our three local governments, these changes will encourage more businesses to choose to locate within the City of Portland and make compliance simple and customer friendly. This will have the added benefit of making the collection and processing of these taxes, all of which are managed by the Portland Revenue Bureau, simpler and more efficient. This is good government at its best where customer service meets smart tax policy to encourage a thriving local economy.” – Andrew Hoan, President & CEO, Portland Business Alliance.