As the state Legislature engages in its biennial budget fandango, here's a sour note: Two out of three large Oregon corporations pay only the $10 minimum corporate income tax.

That state minimum-less than the price of a couple of six-packs-hasn't changed since 1931. And while increasing the $10 figure regularly gets tossed around Salem, the prospect for business lobbies letting that happen appears unlikely again this session.

In 2000, half of all corporations in the state with payrolls exceeding $2 million paid the minimum. In 2002, the most recent year for which statistics are available, more aggressive accounting helped the number jump to more than two-thirds of all major corporations in Oregon.

And those percentages are expected to climb even higher in the years ahead as Oregon changes how it calculates corporate taxes.

In 2003, Oregon adopted what's called a "super weighted sales" formula that will over time reduce taxes on payroll and property and raise the percentage on profits made inside Oregon's borders.

Thus a company like Nike, which makes most of its sales out of state, decreases its liability. Once you factor in losses carried forward from previous years and tax credits for everything from research and development to environmental protection, tax obligations shrink even more.

Businesses argue that at least a portion of lost tax revenue is offset by state income taxes paid by the employees they bring to Oregon. And they say any increase could hurt corporate small fries.

"I've talked to a lot of smaller corporations that are fuming over a possible increase," says Lynn Lundquist, president of the Oregon Business Association.

Meanwhile, a report by the Legislative Revenue Office estimates that boosting the minimum tax to $500 could add an additional $44.9 million-almost 1 percent of the state budget-to Oregon coffers by 2007.

"The corporate minimum is behind the times," says Michael Leachman, policy analyst for the Oregon Center for Public Policy, a think tank promoting tax and budget policies to help low- and moderate-income residents. "An increase would be one small step toward a fair balance between corporations and households."

Minimum Tax Returns for Major Oregon Corporations
Industry Sectorpercent paying minimum in 2002
Health Care and Social Services76.2%
Other Services (except Public Administration)71.5%
Agriculture, Forestry, Fishing and Hunting71.0%
Education Services69.1%
Administrative, Support and Waste Management68.1%
Professional, Scientific and Technical Services68.1%
Transportation and Warehousing67.5%
Arts, Entertainment and Recreation67.2%
Real Estate, Rental and Leasing64.5%
Accommodation and Food Services63.0%
Retail Trade61.5%
Wholesale Trade61.4%
Finance and Insurance58.6%
Management of Companies and Enterprises57.4%
Source: Oregon Department of Revenue

A study by the Council on State Taxation, a nonprofit trade group representing multistate corporations, ranked only Delaware and North Carolina lower than Oregon when measuring the hit from state and local business taxes.