New 2021 Income Tax for Portland Metro Area
On Tuesday May 19, 2020, greater Portland area voters passed the Metro ballot Measure 26-210 to raise money for housing services for individuals and families experiencing or at risk of experiencing homelessness.
The measure will impose a 1% tax on qualifying individuals and businesses located and/or working in Clackamas, Multnomah, and Washington counties. Individuals living in the metro area will owe a 1% tax on taxable income in excess of $125,000 for single filers or $200,000 for those married filing joint. Individuals living outside of the metro area but with earned income from the metro area in excess of $125,000 for single filers or $200,000 married filing joint will also owe the 1% tax.
Businesses with worldwide gross receipts in excess of $5 million will also owe a 1% tax on profits earned in the metro area. Businesses with revenue less than $5 million will be exempt from the tax.
Further clarification is needed as to the specific calculation of earned profit and if an apportionment method will be applied for non-resident individuals and businesses.
The tax is effective January 1, 2021, and is set to be in place for 10 years, ending in 2030. The first annual tax filing will occur in April 2022. Additional information is expected from the Metro Council on implementation.
Further Reading
Ordinance No. 20-1442 and the FAQ sheet prepared by the Metro Council can be found at the following links:
Aldrich is Here to Help
Our team is monitoring these updates closely and will continue to provide relevant information as it becomes available. If you have questions about this new tax or how it affects you, reach out to your Aldrich Advisor.
Meet the Authors
Chad joined the firm in July 2006. He has over 15 years of public accounting experience and provides his clients with expertise in strategic tax planning, multi-state and general tax compliance services, as well as business consulting. He spends his time focusing on construction and construction related clients. Construction Financial Management Association, Member American Institute... Read more Chad Emmert, CPA, CCIFP®
Chad's EXPERTISE
- Construction
- Business consulting
- Strategic tax planning
- Multi-state tax compliance
- Certified Public Accountant
Seneca Steber has more than 13 years of public accounting experience providing tax compliance, planning, and consulting services. He joined the firm in January 2010 after spending the first five years of his career at a big four accounting firm. He has worked primarily with privately held and family businesses, focusing on the construction and... Read more Seneca Steber, CPA, CSEP®
Seneca's EXPERTISE
- Construction
- Certified Public Accountant
- Strategic tax planning and compliance
- Closely-held businesses and owners
- Certified Specialist in Estate Planning
