Admin Order 44-21-07-F -- Payroll Tax Rule Amendments

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Administrative Order - Page 1 of 10 ADMINISTRATIVE ORDER NO. 44-21-07-F of the City Manager AMENDING AND REPLACING COMMUNITY SAFETY PAYROLL TAX ADMINISTRATIVE RULE R-3.762 ADOPTED BY ADMINISTRATIVE ORDER NO. 44-20-05-F. A. Pursuant to the authority contained in Sections 2.019, 3.756, 3.760, 3.762, and 3.764 of the Eugene Code, 1971, on August 19, 2020, I issued Administrative Order No. 44-20- 05-F adopting Community Safety Payroll Tax Administrative Rule R-3.762 to implement the provisions of Sections 3.750 through 3.768 of the Code regarding a Community Safety Payroll Tax. B. On September 21, 2021, I issued Administrative Order No. 44-21-05 ordering that notice be given of the opportunity to submit written comments on a proposal to amend the Rule to correct subsection 1(b) of Rule R-3.762-C, where subsection 1(b) had the effect of excluding self- employed entities with employees from being subject to the quarterly Employer Tax. This amendment will bring the Rule into alignment with Council’s intent of a tax that is shared between employers and employees and will apply to the first quarter filing of 2022 and every quarter thereafter. The Rule amendment is necessary to clarify subsection 1(e) of Rule R-3.762-C to indicate that an employer that qualifies for the reduced tax rate of 0.0015 on the first $100,000 of wages paid by the employer may apply the reduced tax rate to both the quarterly Employer tax and annual Self-Employment tax. C. Notice of the proposed amendments was provided in accordance with EC 2.019(2)(a) and was scheduled to be published in the Register Guard newspaper on September 24, 2021, as required by EC 2.019(2)(b). During the 15-day comment period, a number of comments were received. The comment period closed at the end of the day on October 11, 2021, after which the City learned that the Notice had not been published in the newspaper and, therefore, the notice requirement set forth in EC 2.019(2)(b) was not met. D. In order to comply with all Notice of Rulemaking requirements set forth in EC 2.019(2), a subsequent Notice of the proposed amendments had to be given. However, re-noticing the proposed Rule amendments pursuant to EC 2.019(2) would have caused a delay such that it would be difficult for tax preparers to address any changes in the Rule. Therefore, on November 2, 2021, I issued Administrative Order No. 44-21-06 adopting the Rule amendments as emergency amendments pursuant to EC 2.019(6) so that they would go into effect immediately and remain in effect for no longer than 180 days, with the intent that I would process identical Rule amendments under EC 2.019(2) for permanent adoption. E. On December 7, 2021, I issued Administrative Order No. 44-21-07 ordering that a second Notice of the proposed Rule amendments be given. The Rule amendments proposed by Administrative Order No. 44-21-07 are identical to those proposed by Administrative Order No. 44-21-05 on September 21, 2021, except for the addition of a definition of “Federal Government.”