Here’s an explanation of the Legislative Concept (LC 302) in plain English.
TL;DR: The “Tax Swap” Proposal
This bill proposes a major deal: Oregon would cut income and business taxes significantly, but only if the state establishes a new “Retail Sales Tax”.
Essentially, it shifts the state’s revenue model away from taxing income (what you earn) and towards taxing consumption (what you buy).
1. The “Trigger”: It Only Happens with a Sales Tax
None of the tax cuts in this bill go into effect unless Oregon passes a statewide sales tax on goods and services.
The Requirement: The sales tax must be at least 3%.
The Deadline: The sales tax must be up and running by January 1, 2030.
2. The “Carrot”: Tax Cuts for Individuals and Businesses
If the sales tax is implemented, the state promises to lower other taxes in return:
Personal Income Tax: The bill proposes new tax tables. While the specific rates in the draft look similar to current ones (ranging from 4.75% to 9.9%), the bill mandates that the Department of Revenue estimate the revenue lost due to reductions, implying the goal is a net cut for taxpayers.
Corporate Taxes:
Corporate Activity Tax (CAT): The rate commercial activity is taxed at would be reduced.
Corporate Income Tax: The tax rates on the first $1 million of income (and amounts above that) would be reduced.
Minimum Tax: The minimum tax corporations pay would be slashed. For example, a company with $500,000 to $1 million in sales currently pays $500; the bracket indicates this is being removed or lowered.
Estate Tax (Death Tax): This is a massive change. Currently, Oregon taxes estates worth over $1 million. This bill would raise that threshold to **$13.99 million**, meaning no estate tax would be due unless the estate is worth more than roughly $14 million.
3. Where Would the Sales Tax Money Go?
The money collected from the new sales tax is strictly designated for specific buckets:
Replacing Lost Revenue: First, it must replace the money the state loses by cutting the income and business taxes mentioned above.
Public Safety: Funding for police, firefighters, courthouse safety, and public defenders.
Wildfires & Environment: Money for wildfire suppression, prevention, and the Oregon Conservation Corps.
Education: Funding to add 40 extra hours of instruction time for K-12 students every year.
Economy & Families: Funding for workforce development, increasing the Earned Income Tax Credit (a tax break for lower-income workers), and subsidizing day care [cite: 45-47].
4. Safety Checks
[cite_start]Revenue Neutrality: The Department of Revenue must calculate how much money the state “lost” by cutting income taxes and move that exact amount from the Sales Tax pot into the General Fund to keep the budget balanced.
Summary Table
