Shocking Oregon Law Hits Small Businesses Where It Hurts – You Won’t Believe What Measure 118 Does!

Imagine a tax that was intended to target large out-of-state businesses but ended up burdening Oregon’s main street businesses in the process. Oregon’s Measure 118, portrayed as a tax on big corporations, functions more like a high-rate sales tax on everyday goods and services purchased by Oregonians. While smaller businesses may be below the taxable threshold, they will still feel the impact of this tax, much like consumers who indirectly shoulder the burden of sales tax. This tax is not a saving grace for local businesses; in fact, it puts them at a significant disadvantage compared to their larger competitors.

1. The Burden of Measure 118:
   • Measure 118 establishes a 3 percent gross receipts tax on businesses with over $25 million in revenue.
   • This tax is imposed on gross revenue, often resulting in a much higher tax burden compared to corporate income tax.
   • The tax is imposed at various stages of production, leading to tax pyramiding that affects businesses of all sizes.
2. Impact on Small Businesses:
   • When Oregon businesses purchase goods or services from larger corporations, each transaction incurs the tax.
   • From raw materials to advertising, every aspect of production is taxed, piling additional costs on local businesses.
   • Large corporations have the advantage of vertical integration and the ability to shift operations out of Oregon to avoid multiple layers of tax.

The consequences of Measure 118 go beyond higher prices for consumers; they include a significant blow to Oregon’s small businesses. While proponents suggest that buying local could circumvent the tax, the reality is quite the opposite. Local firms, deeply rooted in Oregon, will bear the brunt of this tax multiple times over, putting them in a precarious position compared to out-of-state competitors.

In conclusion, the implications of Measure 118 are far-reaching. While it may aim to target large businesses, its impact will be most acutely felt by Oregon’s small businesses and their employees. Increased costs of production, higher prices for consumers, and a competitive disadvantage against out-of-state rivals are just a few of the challenges these businesses will face. It’s clear that Measure 118 is not the solution it claims to be; instead, it presents a complex web of challenges for the very businesses it was supposed to protect.