Update - On May 16, 2019, Governor Kate Brown signed HB 3427 also known as “The Student Success Act.”  The new tax will go into effect January 1, 2020.  Read our latest update.

On May 1, 2019, the Oregon House of Representatives passed HB 3427.  This bill is referred to as the "Student Success Act" and is now in the Senate.  If passed in its current form, this bill would:

  • Establish the "Fund for Student Success" which is separate and apart from the General Fund
  • Establish a new tax on business at a rate of 0.57% of taxable commercial activity over $1 Million
    • Allow for a subtraction for 35% of the greater of "input costs" or labor in calculating the tax base
  • Establish a bright line nexus standard as follows:
    • $50,000 of property, or
    • $50,000 of payroll, or
    • $750,000 of sales, or
    • 25% of total property, payroll, or sales in the state
  • Lower the income tax rates of the 3 lowest tax brackets by .25% each resulting in 4.75, 6.75, and 8.75%
  • Allow for private and public charitable contributions to the fund in addition to tax dollars
  • Become effective in 2020

House Bill 3427 has the support of major corporations with strong Oregon presence as well as a good deal of opposition that is calling the bill a hidden sales tax.  The Senate acted immediately on May 2, 2019 with a first reading and referring the bill to the President's Desk.  A vote is expected in the Senate soon.

We will continue to watch the bill's progress and keep you updated.

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