Ballot Measure 67

Measure 67 raises $10 corporate minimum tax, business minimum tax, corporate profits tax . Provides funds currently budgeted for education, health care, public safety, other services.

This measure would raise the corporation minimum tax of $10 for the first time since 1931. S corporations and partnerships would pay a minimum of $150 beginning in the 2009 tax year. The measure will increase what  C corporations  pay on their profits. (S corporations are small corporation with 1 to 100 shareholders.  Profit or loss can be passed to shareholders. S corporations are not subject to corporate tax rates. C corporations are taxed as a separate business and have their own tax rate. They may retain or distribute all or part of their profit. )

Sole proprietor corporations are not subject to the minimum tax.

C corporations with over $500,000 in Oregon revenue will pay a minimum tax of about 0.1 percent of their Oregon revenue. The tax rate for profits over $250,000 would increase by  1.3 percent in tax years 2009 and 2010. In 2011 the amount drops to 1 percent and in 2013 and beyond,  the profits returns to 6.6percent for all C corporation profits below $10 million and the marginal tax rate of 7.6 percent will apply to C corporations. Profits over $10 million. C corporations pay minimum tax or profits tax, not both.

For businesses other than c corporations, such as S corporations and partnerships, the measure sets the taxes at $150.

Filing fees will increase from $50 to $100 for instate businesses and to $275 for out of state businesses.

Estimated financial impact: The state expects between $118 and $138 million per year for 2010, 2011 and 2012, basically for the General Fund. And thereafter, they estimate $123 million annually. Failure could affect a number of budgets and could result in a reduction of federal funds. It might also affect the state’s bonding ability.

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