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Measure No. 28

House Bill 4079--Referred to the Electorate of Oregon by the Legislative Assembly of the 2002 Fifth Special Session to be voted on at the Special Election, January 28, 2003.
 

BALLOT TITLE

TEMPORARILY INCREASES INCOME TAX RATES.

RESULT OF "YES" VOTE: "Yes" vote increases income tax rates for three years.

RESULT OF "NO" VOTE: "No" vote does not increase income tax rates.

SUMMARY: This measure increases income tax rates for three years.
    For personal income taxpayers filing single returns, this measure increases the rate of tax on taxable income of more than $6,450 from 9 percent to 9.5 percent. For taxpayers filing joint returns, this measure increases the rate of tax on taxable income of more than $12,900 from 9 percent to 9.5 percent.
   For corporations, this measure increases the rate of tax on taxable income from 6.6 percent to 6.93 percent.
    The increased rates apply to taxable income earned in the 2002, 2003 and 2004 tax years. This measure restores the existing tax rates for 2005 and later tax years.

ESTIMATE OF FINANCIAL IMPACT: This measure increases income tax rates for three years. This measure is estimated to raise the following amounts for each July 1 to June 30 fiscal year:
 

Fiscal Year Amount
2002-2003: $313 million
2003-2004: $247 million
2004-2005: $164 million

    It is estimated that this measure will increase Oregon personal income taxes for the average personal income taxpayer by $114. For the 2002 tax year, the average increase in personal income taxes for taxpayers at different income levels is estimated to be as follows:
 

Adjusted Gross Income Level Average Change in
Overall Income Tax
Less than $10,000 $ 0
$10,000 to $20,000 $ 17
$20,000 to $30,000 $ 49
$30,000 to $40,000 $ 80
$40,000 to $50,000 $ 107
$50,000 to $75,000 $ 148
$75,000 to $100,000 $ 212
$100,000 to $200,000 $ 385
Over $200,000 $ 1,686
All returns $ 114

    These estimates take into account changes in the federal deduction for state taxes.
 

TEXT OF MEASURE

AN ACT

Relating to taxation; creating new provisions; amending ORS 316.037 and 317.061; providing for revenue raising that requires approval by a three-fifths majority; and providing that this Act shall be referred to the people for their approval or rejection.

Be It Enacted by the People of the State of Oregon:

    SECTION 1. ORS 316.037 is amended to read:

    316.037. (1)(a) A tax is imposed for each taxable year on the entire taxable income of every resident of this state. The amount of the tax shall be determined in accordance with the following table:
 

If taxable income is: The tax is:
Not over $2,000 5% of
   taxable
   income
Over $2,000 but not
   over $5,000
$100 plus 7%
   of the excess
   over $2,000
Over $5,000 $310 plus [9%] 9.5%
   of the excess
   over $5,000

    (b) For tax years beginning in each calendar year, the Department of Revenue shall adopt a table which shall apply in lieu of the table contained in paragraph (a) of this subsection, as follows:
    (A) The minimum and maximum dollar amounts for each rate bracket for which a tax is imposed shall be increased by the cost-of-living adjustment for the calendar year.
    (B) The rate applicable to any rate bracket as adjusted under subparagraph (A) of this paragraph shall not be changed.
    (C) The amounts setting forth the tax, to the extent necessary to reflect the adjustments in the rate brackets, shall be adjusted.
    (c) For purposes of paragraph (b) of this subsection, the cost-of-living adjustment for any calendar year is the percentage (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged index for the second quarter of the calendar year 1992.
    (d) As used in this subsection, "U.S. City Average Consumer Price Index" means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.
    (e) If any increase determined under paragraph (b) of this subsection is not a multiple of [$50] $25, the increase shall be rounded to the next lowest multiple of [$50] $25.
    (2) A tax is imposed for each taxable year upon the entire taxable income of every part-year resident of this state. The amount of the tax shall be computed under subsection (1) of this section as if the part-year resident were a full-year resident and shall be multiplied by the ratio provided under ORS 316.117 to determine the tax on income derived from sources within this state.
    (3) A tax is imposed for each taxable year on the taxable income of every full-year nonresident that is derived from sources within this state. The amount of the tax shall be determined in accordance with the table set forth in subsection (1) of this section.
    SECTION 2. The amendments to ORS 316.037 by section 1 of this 2002 fifth special session Act apply to tax years beginning on or after January 1, 2002.
    SECTION 3. ORS 316.037, as amended by section 1 of this 2002 fifth special session Act, is amended to read:
    316.037. (1)(a) A tax is imposed for each taxable year on the entire taxable income of every resident of this state. The amount of the tax shall be determined in accordance with the following table:
 

If taxable income is: The tax is:
Not over $2,000 5% of
   taxable
   income
Over $2,000 but not
   over $5,000
$100 plus 7%
   of the excess
   over $2,000
Over $5,000 $310 plus [9.5%] 9%
   of the excess
   over $5,000

    (b) For tax years beginning in each calendar year, the Department of Revenue shall adopt a table which shall apply in lieu of the table contained in paragraph (a) of this subsection, as follows:
    (A) The minimum and maximum dollar amounts for each rate bracket for which a tax is imposed shall be increased by the cost-of-living adjustment for the calendar year.
    (B) The rate applicable to any rate bracket as adjusted under subparagraph (A) of this paragraph shall not be changed.
    (C) The amounts setting forth the tax, to the extent necessary to reflect the adjustments in the rate brackets, shall be adjusted.
    (c) For purposes of paragraph (b) of this subsection, the cost-of-living adjustment for any calendar year is the percentage (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged index for the second quarter of the calendar year 1992.
    (d) As used in this subsection, "U.S. City Average Consumer Price Index" means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.
    (e) If any increase determined under paragraph (b) of this subsection is not a multiple of $25, the increase shall be rounded to the next lowest multiple of $25.
    (2) A tax is imposed for each taxable year upon the entire taxable income of every part-year resident of this state. The amount of the tax shall be computed under subsection (1) of this section as if the part-year resident were a full-year resident and shall be multiplied by the ratio provided under ORS 316.117 to determine the tax on income derived from sources within this state.
    (3) A tax is imposed for each taxable year on the taxable income of every full-year nonresident that is derived from sources within this state. The amount of the tax shall be determined in accordance with the table set forth in subsection (1) of this section.
    SECTION 4. The amendments to ORS 316.037 by section 3 of this 2002 fifth special session Act apply to tax years beginning on or after January 1, 2005.
    SECTION 5. ORS 317.061 is amended to read:
    317.061. The rate of the tax imposed by and computed under this chapter is [six and six-tenths] 6.93 percent.
    SECTION 6. The amendments to ORS 317.061 by section 5 of this 2002 fifth special session Act apply to tax years beginning on or after January 1, 2002.
    SECTION 7. ORS 317.061, as amended by section 5 of this 2002 fifth special session Act, is amended to read:
    317.061. The rate of the tax imposed by and computed under this chapter is [6.93] six and six-tenths percent.
    SECTION 8. The amendments to ORS 317.061 by section 7 of this 2002 fifth special session Act apply to tax years beginning on or after January 1, 2005.
    SECTION 9. (1) Notwithstanding ORS 316.162 to 316.212, the Department of Revenue may not adjust withholding tables for tax years beginning on or after January 1, 2002, and before January 1, 2003, to take into account the amendments to ORS 316.037 by section 1 of this 2002 fifth special session Act.
    (2) Notwithstanding ORS 316.557 to 316.589, for tax years beginning on or after January 1, 2002, and before January 1, 2003, interest resulting from the underpayment of estimated tax may not be imposed if the sum of estimated taxes paid by the taxpayer would not have constituted an underpayment of estimated tax prior to the amendments to ORS 316.037 by section 1 of this 2002 fifth special session Act.
    (3) Notwithstanding ORS 314.505 to 314.525, for tax years beginning on or after January 1, 2002, and before January 1, 2003, interest resulting from the underpayment of estimated tax may not be imposed if the sum of estimated taxes paid by a corporation would not have constituted an underpayment of estimated tax prior to the amendments to ORS 317.061 by section 5 of this 2002 fifth special session Act.
    SECTION 10. This 2002 fifth special session Act shall be submitted to the people for their approval or rejection at a special election held throughout this state on January 28, 2003.

NOTE: Boldfaced type indicates new language; [brackets and italic] type indicates deletions or comments.

Explanatory Statement

Legislative Argument in Support

Arguments in Favor

Arguments in Opposition

Table of Contents

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