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<br />Updated 02-07, based <br />Corporate Income Tax <br /> <br />upon 09-01 economic <br />data <br /> <br />Brief Description A tax on the income of businesses or persons earning business income within the City <br />of Funding of Eugene. <br />Option <br /> <br /> <br />Prior City The City has not previously enacted a corporate income tax. <br />Actions and <br />History <br /> <br /> <br />The Multnomah County Business Income Tax requires that all businesses or persons <br />Experience in <br />earning business income within the County pay 1.45% of net income after allowable <br />Other <br />deductions and apportionment. The Tax generated approximately $50.9 million for the <br />Jurisdictions <br /> <br />Multnomah County General Fund in FY2006. <br /> <br />Calculation Base A corporate income tax could be applied to the income of corporations doing business <br />and Typical in Eugene. Alternatively, a surcharge could be applied to the state corporate income <br />Ratestaxes owed by corporations doing business in Eugene. <br /> <br /> <br />Estimated Based upon 2001 data, a 4.5% state corporate income tax surcharge would generate <br />Revenue Yield about $8.1 million: a 1% tax on the income of corporations doing business in Eugene <br /> <br />would generate approximately $2.7 million in FY03. A 10% State corporate income tax <br />surcharge would generate approximately $1.8 million in FY03. <br /> <br />Will the tax be practical to administer <br />: If the Lane County tax is enacted, the City <br />Administrative <br />could piggyback on the County piece or potentially contract with the State and <br />Effort and <br />piggyback on the state corporate income tax. <br />Efficiency <br /> <br />What are the estimated costs to administer <br />: To be determined based upon collection <br />method. <br /> <br /> <br />The City has the authority to levy an income tax. <br />Legal <br />Defensibility <br /> <br /> <br />A corporate income tax would only apply to incorporated businesses earning income <br />Incidence (who <br />from activities within City limits. If it were deemed necessary to treat incorporated <br />pays?) <br /> <br />businesses similarly to other businesses, a corporate tax may be accompanied by a <br />business tax on non-corporate businesses. Alternatively, a personal income tax could <br />be enacted to maintain equity between individuals and corporations. <br />Some portion of the tax could reasonably be expected to be passed on to customers. <br /> <br />Residents/non-residents <br />: Not applicable. <br />Fairness/Equity <br />Business/residences <br />: This would tax business. <br />Issues <br /> <br />Low income vs. higher income citizens <br />: Not applicable. <br /> <br />Are revenues adequate, timely and stable <br />: Tax revenues would mirror current <br />Financial <br />economic conditions. <br />Feasibility and <br />Is this an on-going or a one-time revenue <br />: On-going <br />Stability <br /> <br /> <br />Will this revenue option be perceived as fair <br />: The business community would likely <br />Politically <br />not support this proposal. The corporate income tax was vigorously opposed by the <br />Supportable <br /> <br />Chamber of Commerce in the Report on Alternative Revenue Sources for the City of <br />Eugene, City Club Study Group, 1994. <br />Will this revenue option be easily understood by citizens <br />: Yes <br /> <br />