Mission: Promote a vibrant, sustainable and competitive economy through private sector expansion and job creation.

Goals: Identify current fiscal policy issues; analyze their impact on the private sector economy; discuss their political and financial implications; determine their relevance to AOI members and the Oregon business community.

Capital Gains Taxation

AOI Position:

AOI supports reducing personal income tax rates applied to capital gains.

Under current Oregon tax law, capital gains are taxed as ordinary income making it one of the highest state tax rates on capital gains in the country. In order to encourage business expansion, investment, job creation and the risk-taking inherent in creating start-up companies, Oregon’s capital gains tax rate should be significantly reduced.

Comprehensive Tax and Fiscal Reform

AOI Position:

AOI supports comprehensive tax and fiscal reform that balances Oregon’s state tax structure by reducing its over-reliance on a single revenue source; promotes job creation, economic devel­opment and capital investment; results in a fair tax burden for all classes of taxpayers; and maintains revenue neutrality.  Any tax structure overhaul must be preceded by the development of a sustainable model for government spending, include the pre­emption of certain local government taxes, and limit the sharing of tax proceeds between taxing entities.

Confidentiality of Taxpayer Records

AOI Position:

AOI supports legislation that protects the confidentiality of taxpayer records during litigation before the Oregon Tax Court.

AOI opposes any requirement of a taxpayer to publicly disclose any tax information.

During the course of an income or property tax appeal, the taxpayer is often required to divulge personal and proprietary information.  Procedures that raise doubts about confidentiality will discourage legitimate taxpayer appeals.  The taxpayer should be assured that information will be held in the strictest confidence and not released to the public and potentially to business competitors.

Connection of Oregon Tax Law to Federal IRS Code

AOI Position:

AOI supports maintaining a connection of Oregon personal and corporate income tax law to the federal IRS code. 

Maintaining compliance with Oregon state and federal income tax laws and rules has become increasingly complex and expensive. To ease the burden of compliance on Oregon taxpayers, Oregon income tax laws and rules should be aligned with federal.

Corporate Minimum Tax

AOI Position:

AOI supports updating the corporate minimum tax imposed on C-corporations by setting it at $300, allowing for annual increases based upon the rate of inflation, and dedicating its proceeds to the State’s Rainy Day Fund.

Minimum tax proposals based on gross receipts disadvantage corporations with high sales and low net incomes. Any restructuring of the corporate minimum should be simple, neither benefit nor disadvantage any business, and not be used as an excuse to substantially increase business taxes.

Personal and Corporate Income Tax Kickers

AOI Position:

AOI supports modifying the personal and corporate income tax kickers so that a portion of excess tax collections are deposited into the Rainy Day Fund rather than returned to personal and corporate income taxpayers.

Reserve funds should total at least 12-15 percent of general fund revenue in order to mitigate budget cuts during an economic downturn. A portion of excess tax collections, now returned to personal and corporate income taxpayers under the kicker law generally during improving economic conditions, should be saved for the future.

Long-term State Budgeting

AOI Position:

AOI supports legislation requiring the Governor and legislature to adopt a long-term, ten-year state budget that outlines expected revenues and current-law expenditures.

The adoption of a long-term state budget that compares on-going expenditures with anticipated income will enhance the legislature’s ability to make better spending decisions as well as give the public a better view of long-term program costs.

Rainy Day Fund

AOI Position:

AOI supports modifying the state’s Rainy Day Fund by creating a method for making regular and predictable deposits into the fund, such as a mandatory biennial appropriation, and making it a part of the Oregon Constitution.

If the Rainy Day Fund is to be substantial enough to mitigate budget cuts during an economic slowdown — as it was intended — additional methods need to be in place to assure regular deposits into the fund. Such methods should include a mandatory legislative appropriation to the fund before other spending decisions are made.

Retroactive Application of Department Of Revenue Rules

AOI Position:

AOI supports legislation prohibiting the retroactive application of new Oregon Department of Revenue rules to open tax years.

Oregon businesses complete and file their tax returns based on expert advice and information at their disposal on tax laws and rules in place at the time of filing.  New rules should only apply prospectively.