PORTLAND, Ore. (KATU) — Portland leaders are considering a proposal to reduce taxes for small businesses by raising the income threshold for the city’s Business License Tax.
On Wednesday morning, Portland city councilors unanimously supported the ordinance, which would increase the city’s tax exemption from $50,000 to $75,000 this tax year and then from $75,000 to $100,000 in the 2027 tax year.
This means that businesses would not have to pay the business licensing tax, currently at 2.6% in Portland, on the first $75,000 they make this tax year. That exemption would then increase to the first $100,000 they make next tax year.
The threshold has not changed since 2007.
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Mayor Keith Wilson and Councilor Eric Zimmerman introduced the measure. It is scheduled for a City Council hearing this week.
If approved, the change would take effect next year and align Portland’s exemption with Multnomah County’s existing $100,000 threshold. City leaders say the move would lower taxes for thousands of small businesses and simplify the filing process.
“Our smallest businesses need our help,” Wilson said. “This change provides meaningful relief and supports the people who are building, creating, and contributing to our local economy every day.”
Zimmerman said the proposal would give businesses more flexibility to grow and reinvest.
“This proposal lowers taxes for small businesses across our city, giving them more room to reinvest in their storefronts, hire more Portlanders, and grow,” Zimmerman said. “Small businesses are a core economic engine for Portland. The ones that stayed through the toughest years deserve relief, and this proposal sends a clear message: Portland is open for business.”
According to Zimmerman’s amendment to the ordinance, which passed unanimously on Wednesday, 2023 tax data show that the increase in the exemption for tax year 2026 will give 5,800 businesses $1.2 million in tax relief, an average of $207 per business.
If adopted, the change would take effect when businesses file their 2026 tax returns.
City officials plan to hold a public hearing on the ordinance, allowing community members and business owners to provide testimony.
