The US State of Oregon, in its Initiative Petition 17 (IP 17), has reportedly proposed to raise minimum taxes for corporations in Oregon with sales over USD 25 million.
Initiative Petition 17 proposes to increase state taxes paid by certain corporations and then distribute the increased revenue to Oregon residents in equal amounts. The revenue raised divided by the number of Oregon residents determines the flat rebate amount to be distributed.
Under current law, C-corporations that do business in Oregon are subject to a graduated, annual to residents as either a refundable income tax credit or as a direct cash payment.
Minimum tax that ranges from USD 150 to USD 100,000; the amount increases as sales in Oregon increase from less than USD 500,000 to USD 100 million. It is capped at USD 100,000 for sales above USD 100 million.
C-corporations are required to pay the larger of their tax based on marginal rates of 6.6% and 7.6% of the minimum tax.
S-corporations are subject to a minimum tax of USD 150, regardless of their amount of Oregon sales.
Under IP 17, the minimum tax for C- and S-corporations with annual sales in Oregon that exceed US 25 million would increase.
In addition to changing the corporate minimum tax for C-corporations, IP 17 would also change the minimum tax for S-corporations with sales above USD 25 million.
For C- and S-corporations with Oregon sales greater than USD 25 million, a new tax rate of 3% is imposed on sales above the USD 25 million threshold.
If approved, the tax increase will apply to tax years starting from 1 January, 2025.
