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A3 THE ASTORIAN • THURSDAY, FEBRUARY 20, 2020 State business tax causes confusion Largest tax hike in state history By MIKE ROGOWAY The Oregonian Ross Stock has known since last spring that his soft- wood lumber mill in Toledo would be subject to Oregon’s new, $1 billion business tax. Nine months later, though, he still doesn’t know what it will cost him. The new corporate activ- ity tax, which went into effect in January, appears to be the largest tax hike in state his- tory. Oregon lawmakers approved it last spring, levy- ing a 0.57% tax on most busi- ness transactions within the state to raise $1 billion for schools and education. How- ever, they left the details of the tax to the Oregon Depart- ment of Revenue, and to future legislatures. That means business man- agers like Stock are still puz- zling over what it will cost them and how to plan their investments. And they have to fi gure it right away – the fi rst payments are due at the end of April. “There’s a lot of account- ing confusion just because nobody else has a tax like this in the United States,” lamented Stock, general manager at Western Cascade Industries. His sawmill typ- ically employs 85 and pro- duces 60 million board feet a year, mostly sold to Southern California. Accountants tell Stock they just don’t know how the tax will apply to milled lumber that he sells to buy- The Oregonian ‘There’s a lot of accounting confusion just because nobody else has a tax like this in the United States,’ said Ross Stock, general manager of Western Cascade Industries, pictured, in Toledo. ers out of state. Some of the sales nominally take place in Oregon, but many of them go straight to builders in Cal- ifornia. And he’s not sure whether those sales are tax- able or not. The answer matters a great deal. Stock estimates the impact of the new tax could vary by hundreds of thousands of dol- lars, depending on how the tax applies to those sales and how his suppliers pass along their own costs from the new tax. That’s an enormous amount of uncertainty that will have profound implica- tions for his business, one way or another. “We’re happy to live by the rules. We don’t even know what the rules are,” Stock said. “We don’t want to be at a competitive disad- vantage. We don’t even know how to avoid that.” Business owners, accoun- tants and lawyers all over Oregon are scratching their heads over the new corporate activity tax. It’s unusual in several ways, taxing revenue rather than profi ts and provid- ing few industry exemptions. That’s by design. Law- makers crafted a tax with a low rate, just 0.57%, that applies equally to just about every industry. The idea was that a small tax, spread broadly, would have rela- tively little impact on any one business and be relatively straightforward to administer. From the outset, some industries – construction and manufacturing, among oth- ers – warned the tax would weigh disproportionately on their activities because it applies at each stage of the supply chain. The cumulative effect, known as pyramiding, means that the tax accumulates for products as they move from manufacturer to supplier to the end buyer. Many states have corpo- rate taxes higher than Ore- gon’s. Some, including Wash- ington, levy a tax on revenue. Oregon’s tax is modeled on a similar tax in Ohio, but that tax was a replacement for other business taxes. Oregon layered its tax on top of exist- ing corporate taxes. “Even for seasoned tax- payers you don’t have an equivalent in other states,” said Mike Stober, director of government affairs for Ore- ICE subpoenas county sheriff’s offi ce Working around state’s sanctuary law By CONRAD WILSON Oregon Public Broadcasting The Washington County Sheriff’s Offi ce said Tues- day it would comply with subpoenas from U.S. Immi- gration and Customs Enforcement for informa- tion the agency is seeking about two people it wants to deport. The move appears aimed at circumventing Oregon’s sanctuary law, which is among the oldest in the country and has long blocked ICE and local law enforcement agencies from sharing some information. ICE is seeking details about two Mexican nationals that it claims are not in the country legally. According to jail records posted online, the Washington County Jail is currently holding both men. An ICE offi cial said its use of subpoenas is not new, but historically the agency hasn’t issued them against other law enforcement agen- cies. Still, these are the fi rst subpoenas by ICE in Oregon. Last month, ICE began issuing subpoenas to other law enforcement agencies in Denver and New York, both so-called sanctuary communities. They’ve since expanded the practice to California and Connecticut, which also limit local law enforcement’s interactions with ICE. Oregon’s sanctuary law is more than 30 years old and has served as a model for others. It limits local and state police from enforcing federal immigration policies. The legislation was intended to prohibit racial profi ling. It says no law enforcement agency can use its resources for the sole pur- pose of detecting or appre- hending people whose only violation is being in the country unlawfully. In 2018, voters rejected an effort to repeal the sanc- tuary law, with 63% voting to keep it in place. But that hasn’t stopped ICE from issuing requests to jails across the state to hold inmates who are from other countries. Oregon jails have largely ignored those requests. Oregon and other sanctu- ary communities don’t com- ply with ICE detainers, in part because they’re signed by other ICE offi cials, not a judge. For that reason, oppo- nents have argued they are not legally suffi cient to com- pel local authorities. ICE has argued that local jurisdic- tions should comply with its detainer requests. “Politically motivated sanctuary laws tie the hands of local law enforcement agencies who clearly see that working with ICE is crucial to public safety,” said Bryan Wilcox, deputy fi eld offi ce director for ICE’s Enforce- ment and Removal Opera- tions in Seattle. Washington County said Tuesday that their lawyers had reviewed the subpoenas and would comply. “Oregon law prohib- its local police from shar- ing certain information for purpose of enforcement of federal immigration laws, Clatsop Post 12 Clatsop Post 12 PORK CHOP DINNER SPAGHETTI FEED FUNDRAISER WITH SCALLOPED POTATOES, GRAVY, VEGGIES AND COLESLAW Friday Feb. 21 ST 4 pm until gone $10 per plate February 22 nd , 4-8 PM To go orders welcome Live Music • Silent Auction No Host Bar $ 9.00 6PM “Karaoke Dave” Come Support HD32 Candidate Vineeta Lower ASTORIA AMERICAN LEGION ASTORIA AMERICAN LEGION Clatsop Post 12 Clatsop Post 12 1132 Exchange Street 503-325-5771 1132 Exchange Street 503-325-5771 except as provided by state or federal law,” the Wash- ington County Sheriff’s Offi ce said in a statement. “The information sought in these subpoenas relates to information that local police are generally pro- hibited from sharing under Oregon law and failure to comply with these subpoe- nas may be punished by an order of contempt by a fed- eral judge.” The Trump adminis- tration has waged a bat- tle against sanctuary juris- dictions over the last three years. Just last week, U.S. Attorney for Oregon Billy Williams said he supported a U.S. Department of Justice lawsuit against King County, Washington, after the county blocked the use of its airfi eld for ICE deportation fl ights. “I share the Attorney General’s belief that sanc- tuary status declarations directly contravene fed- eral immigration law and threaten public safety,” Wil- liams said in a statement. “The notion that states and other jurisdictions can inter- fere in the sharing of criti- cal public safety information involving criminal conduct ignores the supremacy of federal law.” Despite many studies and data to the contrary showing immigrants commit fewer crimes than native-born Americans, immigration offi cials have repeatedly highlighted high-profi le cases involving immigrants in sanctuary communities who commit violent crimes as a way to rail against the policies. The issue is so divisive that Portland’s elected offi - cials voted to pull police offi cers off of the FBI’s Joint Terrorism Task Force in 2019 over its limited use of immigration-related arrests. Some immigration attor- neys bristled at the idea of ICE issuing subpoenas, not- ing they’re very similar to an administrative ICE warrant. “Both are administra- tively issued without any court involvement or proce- dural safeguards,” said Ste- phen Manning, director of the Innovation Law Lab. “The story here is ICE and the Trump administration’s intimidation tactics aimed at jurisdictions like Ore- gon who are not just throw- ing their justice systems into anti-immigrant deportation actions and rather insist on procedural and constitu- tional regularity.” Re-Elect KathleenSullivan County Commissioner gon Business & Industry, the state’s largest business association. “This is uncharted terri- tory for everybody,” Stober said. Businesses large and small are still awaiting defi n- itive word from the Ore- gon Department of Revenue on which sales, specifi cally, the state believes are subject to the tax. The department didn’t post its fi rst tempo- rary rules until December and now has 17 altogether. Final rules will come later this year. Businesses, though, have to make decisions now. They owe taxes quarterly, with the fi rst payments for the cor- porate activity tax due April 30. Legislation now under consideration could provide some fl exibility in how tax collectors treat businesses that pay too little while the rules are still evolving. Lawmakers in Salem are using the short legislative session to weigh additional changes that could clarify the situation – or muddy the waters further. And big indus- tries are lobbying for exemp- tions that could save them millions of dollars. The corporate activity tax aims to raise $1 billion alto- gether, boosting state educa- Consult a PROFESSIONAL Q: What’s new? 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So lawmakers cut Ore- gon’s personal income tax at the same time they raised business taxes, hoping to off- set higher prices they antici- pate some retailers will pass on to consumers. Oregon companies have long enjoyed some of the nation’s lowest business taxes, according to govern- ment spending watchdogs, primarily because the state doesn’t have a sales tax. The corporate activity tax will change the equation – but not dramatically. The “pro- growth” Tax Foundation esti- mates Oregon will fall from No. 8 in the nation for lowest business taxes to No. 15. have different options for A: We you if you are heading out of Jeremy Feldman town. We can switch you to a Web subscription while you are away and Circulation Manager you can read the paper online, or you can have your delivery stopped and donate your missed papers to local schools. Whichever option fits your needs, just call our circulation department at 800-781-3214 or go www.dailyastorian.com online and enter your vacation at 949 Exchange St., Astoria, OR www.dailyastorian.com under “Subscriber Services.” 800-781-3214