By Oregon Small Business Association,

UPDATE JULY 12, 2021: The $50 million small business tax barely passed the Senate on June 21st and House on June 24th.  It is now before the Governor’s desk.

Here is a technical description of the bill:

Senate Bill 139 raises small business taxes on family owned businesses by nearly 20%.  It raises the income rate for these family owned businesses (pass through entities, LLCs, partnerships) by $50 million.

Oregon small business owners are outraged that Oregon will be among the few states that will be raising taxes on small businesses in the pandemic thanks to SB 139 which passed the Senate. Despite record level budget surplus and opposition from both Democrat and Republican lawmakers, the small business tax still narrowly passed the Senate by one vote.

SB 139 raises $50 million in new taxes on small family-owned businesses and mostly on the small family-owned businesses. Many small shops will see their tax rate increase by 17%. The bill sets up a new complex “outside” employee requirement – so if your business is run by just your family and fellow owners your tax rates goes up by the 17%.

According to the Legislative Revenue office this bill targets around 2000 small mom & pop or start-up business owners who are unable, or have yet, to hire outside employees – targeting these smallest businesses to raise their tax rates.

Literally two businesses conducting the exact same activity, with the same revenue, with the same legal structure, would pay dramatically different tax rates – separated only by who meets this complex employee requirement scheme.

The $50 million tax comes at a time when State Government has been witnessing billions in surplus revenue from a rebounding economy and Federal relief funds.
Oregon has already lost over 1,000 restaurants in the pandemic. One closed restaurant made their Facebook announcement by saying, “It hurts to be a small business casualty of Covid-19…There’s a reason I can’t listen to the theme of cheers without crying my eyes out. It’s because I know exactly what it’s like to work in a place where people walk in the door and everybody knows their name.”  Although the lawmakers offered token tax relief for some businesses in the bill, the bill itself still raises $50 million in new taxes when it is fully implemented.

OSBA is asking everyone who cares about small family owned businesses to call the Governor and encourage her to veto SB 139.   The bill raises the tax rate set by a bipartisan group of lawmakers and Governor John Kitzhaber back in 2013.  In 2018 Governor Brown called a Special Session specifically to protect and expand the current tax rate for small business.   Now Governor is being asked to do the opposite by raising the tax rate on small businesses and during a pandemic.

Governor Kate Brown
Leave a message for her to Veto SB 139 the small business tax.
Phone: (503) 378-4582

bill language on SB 139 here.