Lawmakers have asked the Legislative Revenue Office to analyze the potential economic impact of the proposed gross receipts tax.

SALEM — Economists who work for the Oregon Legislature are beginning the complicated task of analyzing how a proposed corporate sales tax measure would affect the economy.

The union-backed tax measure planned for the 2016 ballot would require certain corporations to pay a 2.5 percent tax on sales in Oregon greater than $25 million. Republican lawmakers in particular have pushed for the Legislative Revenue Office to analyze the potential economic impact of the measure, currently referred to as initiative petition or IP 28.

Economists in the office have already projected the tax would raise an additional $2.65 billion annually for the state, but they have yet to complete a more detailed analysis that includes the indirect impact or “behavioral response” from businesses and the broader economy.

“This is the third time I’ve asked this, by the way, gentlemen,” state Sen. Brian Boquist, R-Dallas, said during an interim meeting of the Senate and House revenue committees Dec. 2. Boquist called the tax measure “the 800-pound gorilla in the room” and said Oregonians need the independent analysis in order to make informed decisions about the measure.

Rep. Cliff Bentz, R-Ontario, also called for economists to move ahead with the analysis. “I’ve lost track, literally, of the number of times different folks up here have said something about the unforeseen consequences of measure fill in the blank, 55, you name it,” Bentz said.

Lawmakers could also use the information to draft an alternative tax measure in the 2016 legislative session, although it is currently unclear whether there will be enough support for a bill.

Chris Allanach, a senior economist in the Legislative Revenue Office, said the staff planned to start immediately on the analysis. Until recently, the Legislative Revenue Office was busy producing a report ordered by the Legislature on options to overhaul Oregon’s state and local tax system. The office presented that report to lawmakers Dec. 2.

Legislative Revenue Officer Paul Warner said it will be complicated to analyze the impact of the proposed corporate sales tax, largely because it applies to very specific companies: “C” corporations with more than $25 million in sales inside Oregon. The proposed measure also contains an exemption for corporations registered with the state as “benefit companies.”

Staff at the Legislative Revenue Office will have to review tax returns at the Oregon Department of Revenue, to gather the detailed data they will eventually feed into a computer model. “We do have quite a bit of work to really make a decent estimate on IP 28,” Warner said. “And we’d much rather do that than throw something together that we aren’t confident in, and we’ll end up having to change at a future time.”

The Legislative Revenue Office will produce a formal research report by the time the Financial Estimate Committee or “price tag panel” meets in July to prepare official analyses of ballot measure impacts for the voter’s guide. In the meantime, Warner said the office will also share its analysis with lawmakers on a rolling basis.

The group Our Oregon is gathering the necessary 88,184 signatures ahead of a July deadline to get the measure on the November ballot. As of Dec. 1, supporters had submitted more than 4,400 signatures to the Oregon Secretary of State’s office, according to agency spokeswoman Molly Woon. A majority of the signatures have not been verified.

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