City Council Will Consider Clearer Definition of “Retailer” for Portland Clean Energy Fund This Week

Impact of narrower definitions would reduce annual revenue by about $10 million.

Lloyd Center Mall. (Abby Gordon)

Portland City Council will consider an ordinance on Dec. 11 that would significantly reduce the revenue generated by the Portland Clean Energy Community Benefits Initiative, the new tax voters approved in 2018.

That tax was pitched to voters as a tax on big retailers—such as Walmart or Target—that have revenues of more than $500,000 in Portland and more than $1 billion nationwide. Such companies will pay a surcharge of 1 percent on gross revenues generated in the city.

The new money generated is slated to be used for energy efficiency and job creation in under-served communities.

Prior to the 2018 election, proponents said the measure would raise about $30 million annually but since the new tax passed, that number has more than doubled because of loose definitions of which companies qualify as "retailers."

As WW has previously reported, companies that don't engage in typical retail transactions, such as garbage haulers and construction companies, have been included in the working definition. That caused a lot of angst in the business community and there have been a series of discussions aimed at clarifying who would pay the tax.

On Dec. 11, Mayor Ted Wheeler will introduce a resolution that exempts construction companies, garbage haulers and recyclers, and qualified retirement plans from the list of those subject to the tax.

If council approves the ordinance, the exemptions will reduce revenue from the new tax from the current estimate of $54 million to $71 million to a lower estimate of $44 million to $61 million, a reduction of $10 million a year.

One other proposed change in the ordinance: Council will consider whether to extend the proposed waiver of a 5 percent cap on administrative expenses from the end of calendar year 2020 to June 2022, which would cover the management burden of making sure the new taxing mechanism works as planned.

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