Oregon business want judge to reject how Metro’s new homeless service tax will be collected

By Alex Hasenstab (OPB)
May 25, 2021 3:06 p.m.

A judge will decide if the plan for implementing the tax is valid.

A coalition of businesses wants a judge to invalidate the way Metro, the Portland area’s regional government, wants to collect a new homeless service tax.

Approved by voters last May, the tax is expected to bring in up to $250 million a year to support people experiencing homelessness in Multnomah, Clackamas and Washington counties. The program is funded by two separate taxes: a 1% personal income tax on taxable income above $125,000 for individuals and $200,000 for those filing jointly; and a 1% business income tax on net income for businesses with gross receipts above $5 million.


Recently, a group of Oregon businesses headed by the Portland Business Alliance challenged Metro’s plan for implementing the tax. Nikki Dobay, a lawyer representing the businesses, says they are concerned about the way the tax would be collected because, they say, it doesn’t align with state tax laws.


Dobay said Portland, Multnomah, and Oregon tax laws differ. But she says Metro, being a multi-county agency, is required under a specific statute ORS 268 to administer taxes the same way Oregon state taxes are administered. Metro plans to administer the tax in a way that aligns more closely to Portland and Multnomah County tax laws.

Dobay said there could be some negative impacts to certain businesses and that, under the current tax model Metro has proposed, local service providers will be taxed more heavily than businesses located in Oregon but provide service out of state.

Multnomah County Circuit Court Judge Steffen Alexander, who oversaw a remote hearing on the matter last week, will make a decision this summer. Dobay said if businesses are successful, Metro can go back to the drawing board to change the implementation ordinances on the tax. They can also appeal the decision.

Dobay said the groups she represents are not against the tax but the implementation method.