SB 140 Raises CAT exemption level, but increases tax

06/10/2023
SB 140
VOTE:NO – Died In Committee
Status (overview) of bill:https://olis.oregonlegislature.gov/liz/2023R1/Measures/Overview/SB140
Committee assigned to bill:https://olis.oregonlegislature.gov/liz/2023R1/Committees/SFR/Overview

This bill amendment-3 raises the Corporate Activities Tax (CAT) exemption level from $1 million to $2 million (-5 amendment is $3 million and reduces labor deduction to $125,000 per employee) to help spare the pain on many businesses. Yet at the same time raises taxes on businesses by 16% by reducing expense deductions for certain businesses, $2M to $10M, and raising the tax rate 7% for other larger companies. (-5 deletes this provision and reduces tax to state from 35 to 32% – -3 is 30%)

So in essence, it makes a bad tax worse for many while letting some escape the tax altogether.

• The CAT tax was responsible for destroying NW’s home grown Bi-Mart pharmacy chain. (-5 increases pharmacies from 9 to 25 or fewer.)

• The CAT tax is why Oregon’s manufacturing has decreased double the national average.

• The CAT tax is among the few places in America that dares to tax business revenue (instead of profits). This means the CAT tax hits businesses when they are not making a profit. The politicians want their tax money no matter how much it hurts the little guy. This taxing businesses not making a profit proved disastrous during COVID when businesses were told to shut-down and as they lost profits teh CAT tax still hit them!