Item B: Public Safety Task Force Update

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. Currently implemented in another Oregon county, relatively easy to clone . Would be deductible business expense for state and federal taxes . Administration of tax likely contracted out, not requiring increased county staffing . Does not treat small and large businesses differently . Provides increased share of county funding from business sector Disadvantages . A visible tax, perceived as negative factor, for prospective corporate residents . Receipts will fluctuate with economic conditions, difficult to predict . Does not tax sole proprietors, partnerships Retail Sales Tax Description of Tax: A county sales tax would be an excise tax on practically all retail sales of goods within the county boundaries. Various options exist as to what items are taxed, e.g., all goods or some goods and services. lIDs analysis assumes that the basis would be similar to the Washington state sales tax, which applies to the selling price of tangible personal property and certain services purchased at retail, i.e", by consumers" In general, the tax applies to goods, construction including labor, repair of tangible personal property, lodging of less than 30 days, telephone service and participatory recreational activities. Most services to persons and businesses are not taxed. Exempted items would include in-home food, prescription drugs, most services, medical sales, utilities, rents or fabricated for ultimate sale at retail. Yield I Adequacy: A one-percent tax Washington-type tax on retail sales within Lane County is estimated to have raised $47.7 million if in effect in calendar year 2005 and $50,,0 million in 2006. Over time, tax receipts will grow almost as much as personal income growth. Advantages . Generates adequate revenue, permitting reduction of other taxes . Allows taxes to be paid "pay as you go", in small amounts . Provides reasonable growth, mirrors economic conditions . Would help "lock in" local government share if state tax enacted . Everyone pays, including tourists and the "underground" economy Disadvantages . Lane County would be fIrst Oregon county with a sales tax . Increased administration cost for a new tax . More regressive than income tax . Not deductible for state and federal income tax . Creates burden for retail businesses to collect tax Gross Receipts Ta.x Description of Tax: A gross receipts tax for Lane County would be similar to Washington's Business and Occupation (B&O) tax, which is imposed on business gross income, rather than on Executive Summary - Lane County Public Safety Task Force Final Report 25