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Business tax revisions stir debate

Since the fall of 2001, a committee has been studying ways to replace the business income tax, levied by both Portland and Multnomah County, on locally generated business income. The tax, imposed since 1974, is actually not one but two taxes: Multnomah County's business income tax and the city of Portland's business license fee. Every company doing business in Multnomah County pays the first tax, and every Portland business pays both.

How do the taxes work?

They're complicated. Multnomah County levies a tax of 1.45 percent of a company's business activity in Multnomah County, while the Portland tax is 2.2 percent with a $100 minimum. The city and the county use the same complex formula to calculate what portion of a company's revenue can be taxed.

The money from both taxes goes into city and county general funds and pays for police, parks, jails and health and other city and county services. In the 2000-01 fiscal year, the taxes generated $51.9 million for the city and $29.9 million for the county, for a total of $81.8 million. That's up from $43.9 million in fiscal 1991-92.