SALEM — As Oregon lawmakers talk about raising more tax revenue from individuals, there’s a chance corporations may get millions in automatic tax rebates.
State tax collections are flirting with the threshold that would trigger millions of dollars in rebates to corporations under a tax unique to Oregon known as the “kicker.”
Voters decided in November that corporate kicker rebates should go to schools instead, but that doesn’t take effect until the next budget cycle. If corporate tax collections exceed projections by at least 2 percent once the two-year budget period ends June 30, the entire surplus would be returned to corporations.
The risk comes as majority Democrats push to limit tax credits and deductions to raise an additional $275 million from individual taxpayers over the next two years.
The latest projection by economists, released last month, estimated that corporate tax collections would be less than $14 million short of the $896 million threshold that would trigger a corporate kicker. State Economist Mark McMullen said at the time that there’s about a 50-50 chance of crossing that line, and Legislative Revenue Officer Paul Warner said Wednesday that McMullen’s assessment still stands.
Businesses have two quarterly tax payments due before the end of the biennium, in April and June.
The House Revenue Committee is scheduled to consider a bill Thursday that would spell out how to implement the ballot measure. Some lawmakers have discussed extending the 2012 ballot measure so it applies to the current budget cycle — a move that would require support from a supermajority of the House and Senate.
“The voters have spoken, and I think it’s very clear what the voters’ intent is,” said Sen. Ginny Burdick, a Portland Democrat who leads the Senate Finance and Revenue Committee.
There’s a wider gap to trigger the personal kicker, which is triggered when tax revenue from all sources other than the corporate income tax — primarily the personal income tax — exceeds projections by at least 2 percent. The February forecast projected that those forms of revenue would be $177 million short of the threshold.
Ryan Deckert, president of the Oregon Business Association, said his organization hasn’t taken a position on what the state should do if the kicker is triggered. The business group scheduled its next board meeting in Salem after the May revenue forecast so that board members could take a position on the kicker and other big budget-related issues, Deckert said.
Copyright 2013 The Associated Press.