HB 2017: Transportation funding bill creates new payroll tax

August 25, 2017

Background

In May 2016, the Oregon Legislative Assembly appointed the Joint Committee on Transportation Preservation and Modernization to assess Oregon's statewide transportation needs and needed improvements. The committee held meetings throughout Oregon in the following months, with their efforts resulting in HB 2017 during the 2017 Regular Session of the Oregon Legislative Assembly. The governor signed the bill on August 18, 2017, with an effective date of October 6, 2017.

What the bill does:

In addition to increasing certain transportation-related fees and taxes, the bill imposes a tax of 0.1 percent on employee wages. According to HB 2017, Section 122a:

A tax is imposed at the rate of one-tenth of one percent of: (a) The wages of an employee who is: (A) A resident of this state, regardless of where services are performed. ... (B) Not a resident of this state, for services performed in this state.

Employers who knowingly fail to withhold the tax are subject to a penalty of $250 per employee, up to a maximum penalty of $25,000.

Other impacts:

  • Allows for increases in the motor fuel tax (gasoline tax)
  • Increases the mileage and axle weight tax rates for calendar years 2018 and 2019
  • Imposes a privilege tax of 0.5 percent of the retail sales price of new taxable motor vehicles with a gross vehicle weight of 26,000 or fewer pounds sold in this state. Imposes a use tax of 0.5 percent of the retail price of a new taxable motor vehicle purchased from any seller outside of Oregon and brought into the state.
  • Imposes excise tax of $15 on the sale of taxable bicycles valued at $200 or more at retail in this state.

Additional Information and Resources:

HB 2017 Overview and Links to Bill Summary

For more information on bills considered during the 2017 Regular Session or previous legislative sessions, visit the Oregon Legislative Information System website

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