When a tax isn’t a tax

Rep. Sal Esquivel

Rep. Sal Esquivel

When is a tax not a tax? It depends on who you ask.

This week, we took a vote on House Bill 3477. The stated purpose of this bill was to close tax loopholes for out of state banks. But like many issues, this is more complicated than that.

In the 1990s, there were around nine companies that started doing real estate lending in Oregon. The loans they issued made the dream of home ownership possible for people throughout the state by offering them multiple financing options.

These companies were excluded from some Oregon taxes because they had no physical presence in the state. They did, however, pay those taxes in the states where they were actually located.

When HB 3477 came up for a vote, my colleague, Rep. Vicki Berger from Salem, raised the question on the House floor of whether this bill was a tax increase. Rep. Berger is a member of the Revenue Committee, so she is very familiar with these matters.

This distinction was important, because a revenue raising bill requires only a simple majority vote. A tax bill, however, requires the approval of a supermajority of 36 votes.

Even though all indications are that HB 3477 was a tax bill, the House speaker ruled that it  wasn’t. The vote was taken, and the bill passed.

I am appalled that the speaker would disregard the system and processes that guide this chamber, and won’t be surprised if her decision gets challenged in court.

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