Tax man goes to work after voters say yes
Multnomah County's financial mastermind begins working out how to collect the new levy
Multnomah County set out this week to do something no Oregon county has done before: set up a system for collecting income taxes.
Voters approved Measure 26-48, and that means the county needs ways to collect, audit and enforce the new tax, which will expire in three years. The tax will generate as much as $135 million a year, depending on the economy, for schools, human services and public safety.
One bureaucratic impediment remains, though. The ballot measure didn't spell out all the details of how the tax will work, instead designating the county's finance director as administrator of the tax, with the responsibility for adopting the necessary administrative rules.
Collecting income taxes, though, isn't exactly part of the county's core mission, said Dave Boyer, the county finance director who woke up Wednesday morning after a sleepless night with the task of making it work. There's no model to work from.
'It's going to be a little bumpy, and it's not going to please everybody,' Boyer said. 'But we're moving forward.'
Boyer estimates that administration of the tax will cost $3 million to $3.5 million annually.
Some things about how the system will work are clear, but some are not. The county, for example, is considering whether to hire a third party to handle tax collection.
The city of Portland's Bureau of Licenses is a potential candidate for that job. The bureau already collects the county's business income tax, has an audit staff that understands tax law and has a computer system that perhaps can be adapted to handle county income tax.
County officials are still working out the details of how the system will work. Here is what they know so far:
• The first county income tax will be due April 15, 2004, for income earned from Jan. 1 to Dec. 31, 2003. The last will be due April 17, 2006, for the year 2005.
• All Multnomah County residents with Oregon taxable income are obligated to pay the tax. No one living outside Multnomah County will have to pay.
• The 1.25 percent tax rate will be levied on taxable income reported on Oregon income tax Form 40 or 40s, minus a $2,500 deduction for single taxpayers or $5,000 for those who are married or the head of household.
• Employers won't be required to withhold county income taxes from worker paychecks. But the county is developing an optional withholding method. Details are expected by September.
• Forms for making quarterly payments also will be available by September.
• Boyer hopes to develop a simple one-page tax form that will be sent out with instructions later this year.
• The county will adopt the Oregon Department of Revenue administrative rules for enforcing the tax.
'We will have whatever the state already has to collect the state income tax,' Boyer said. The county already has the authority to go to court to chase down business income tax scofflaws.
Further details on how the tax will be collected and enforced will be posted today on the county's Web site, www.co.multnomah.or.us.
Boyer couldn't get fully started on the planning, he said, until he knew that the measure had passed.
'I've been thinking about this for two months,' he said, 'but haven't been able to really focus on it yet.'