A Rundown of Unique Taxes Portland, Oregon Residents Pay

A Rundown of Unique Taxes Portland, Oregon Residents Pay

Unique Taxes Portland, Oregon Residents Pay

Portland, Oregon, known for its vibrant culture, diverse neighborhoods, and progressive values, also stands out for its distinct tax landscape. While the city itself offers plenty of perks to its residents, it also has some unique taxes aimed at supporting community initiatives. From funding affordable housing to expanding preschool access, these taxes are designed to address pressing social issues. Let’s dive into the specific taxes that Portland residents may pay, including the Portland Metro Supportive Housing Services Income Tax and the Multnomah County Preschool for All Income Tax.

1. Portland Metro Supportive Housing Services Income Tax1

One of the most notable taxes affecting Portland residents is the Portland Metro Supportive Housing Services Income Tax. Introduced in 2020, this tax is part of a regional effort to combat homelessness in the Portland metro area, which includes the city and its surrounding suburbs. The goal of this tax is to fund services that provide long-term housing and support for people experiencing homelessness.

The tax applies to individuals with taxable incomes above $125,000 and couples or heads of households with taxable incomes above $200,000.1 The tax rate is 1% on taxable income exceeding these thresholds. For example, if an individual earns $150,000 annually, they would pay the 1% tax on the $25,000 above the $125,000 threshold, which would amount to $250.1 For a couple earning $250,000, the tax would apply to the $50,000 above the $200,000 threshold, totaling $500.1

The funds generated by this income tax go directly to supportive housing services, which provide housing, mental health support, job training, and substance abuse treatment for those in need. The initiative is a major part of Portland’s efforts to reduce homelessness, which remains a critical issue in the city.1

 

2. Portland Metro Supportive Housing Services Income Tax2

Another significant tax introduced in recent years is the Multnomah County Preschool for All Income Tax, aimed at making early childhood education more accessible for all families in the county, which includes Portland. Passed in 2020, this tax is designed to fund universal preschool education, ensuring that every child in Multnomah County has the opportunity to attend high-quality preschool, regardless of their family’s income. 2

The tax applies to individuals earning more than $125,000 per year, and couples or heads of households earning more than $200,000.2 Similar to the housing services tax, the rate is 1% on the taxable income that exceeds these thresholds. 2 The revenue generated from this tax supports the creation and expansion of preschool programs that are free for families, particularly those with lower incomes.

By funding preschool education, the county aims to level the playing field for all children, regardless of their socioeconomic background, and improve long-term outcomes such as academic performance and overall well-being.3 It’s a progressive initiative designed to ensure that every child in Portland has the best possible start in life.

3. Portland’s Business Taxes

In addition to these income taxes, Portland residents who own businesses also pay a variety of local business taxes. One such tax is the Business License Tax, which applies to any business that operates within the city.4 This tax is based on gross revenue and is typically around $100 per year for small businesses.5 Larger businesses pay more, depending on their revenue. Portland also imposes a Business Income Tax for businesses operating within city limits, calculated as a percentage of their taxable income.6

4. City of Portland Arts Tax7

Portland is known for its arts and culture scene, and one way the city supports this is through the Portland Arts Tax7, which was introduced in 2012. This tax is a flat $35 per person for any Portland resident over the age of 18.7. While not a traditional income tax, this fee funds local arts and culture programs, including grants for community-based arts organizations, public art projects, and educational programs for local youth. The revenue from the Arts Tax helps to enrich the city’s cultural fabric and ensures continued support for the arts in Portland.

5. Property Taxes

Like most areas, Portland residents also pay property taxes, which are levied by both the city and county. Property taxes in Portland are primarily based on the value of the property, and they help fund public services, including schools, parks, and public safety. In recent years, property tax rates in Portland have been among the highest in the state, which reflects the high demand for real estate in the area.8

Portland’s property taxes are based on a rate per $1,000 of assessed value, with different rates applied depending on the property’s location.9 This can mean significant differences in the amount property owners pay, depending on whether their home is located within the Portland city limits or in a nearby suburb.

5. Transient Lodging Tax9

Portland also has a Transient Lodging Tax (often called a hotel tax), which is levied on those who stay in short-term rentals or hotels within the city. This tax is typically 10.5% of the rental price and applies to anyone staying in a hotel or rental property for less than 30 days.10 The funds from this tax help to support tourism-related services and infrastructure, such as the maintenance of public parks, cultural events, and tourism promotion.

Conclusion

Portland, Oregon, has a unique mix of taxes. From funding supportive housing services to ensuring access to preschool education, these taxes are designed to improve the quality of life for all Portland residents. While these taxes can be significant for those who meet the income thresholds, they also play a crucial role in creating a more equitable and supportive community. Understanding these taxes is essential for residents who want to make informed decisions about their finances and their role in supporting Portland’s growth and prosperity.

 

About Harlow Wealth Management

Harlow Wealth Management, Inc. is an independently owned and operated advisor. We serve clients living in the greater southwest Washington and Portland metropolitan areas, with an office in downtown Vancouver, Washington. While our firm was officially created in 2005, our founding president, Danny Harlow, has been serving the retirement financial planning needs of our community since 1973. We focus on helping those who are retired or about to retire by building a customized retirement strategy. Our proprietary approach, the “Harlow Way”, addresses the following 5 key areas: designing a sustainable retirement income strategy, addressing healthcare and long-term care risk, investments and growing your portfolio, taxes, and estate/legacy strategies.

References

  1. https://www.oregonmetro.gov/public-projects/supportive-housing-services-tax
  2. https://www.portland.gov/revenue/personal-tax
  3. https://multco.us/info/families-preschool-all
  4. https://www.portland.gov/code/7/02/500
  5. https://assets.osbplf.org/forms/practice_forms/City%20of%20Portland%20and%20Multnomah%20County%20Business%20Tax.pdf
  6. https://www.portland.gov/code/7/02/500
  7. https://en.wikipedia.org/wiki/Portland_Arts_Tax
  8. https://www.tax-rates.org/oregon/multnomah_county_property_tax
  9. https://www.portlandrealestate.com/blog/multnomah-county-property-taxes/
  10. https://www.portland.gov/revenue/transient-lodgings-tax

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