By Richard Emmons
On Aug. 10, the Josephine County Commissioners voted unanimously to place a 3% seasonal sales tax before the voters in November. The proposed sales tax would be 3% on the first $2,000 of most sales of products and services. Transaction amounts above $2,000 would not be taxed. The sales tax would be charged for the six-month period from April 15 to Oct. 15 of each year.
The revenue from the new tax would be used exclusively for law enforcement services. The 3% tax is projected to raise $18 million dollars, which would be divided between the Sheriff’s Department, the city of Grants Pass and the city of Cave Junction, based on population. The $18 million projection came from the Legislative Research Office in Salem and is marked “Preliminary Working Draft.” The projected funding would allow the Sheriff’s Department to increase the number of patrol officers from 18.5 in the current fiscal year to up to 44 and increase patrols from 20 hours per day to 24 hours per day.
The Grants Pass City Council voted 4-3 on July 20 to endorse the county’s 3% sales tax measure. Councilors Curt Collins, D.J. Faszer, Valerie Lovelace and Rick Riker voted in favor, while Councilors Joel King, Vanessa Ogier and Rob Pell voted against. Councilor Brian DeLaGrange was not present for the vote. DeLaGrange told the Eagle by email, “I would have voted no on that specific motion. … If the commissioners decide this is the path they want to go down, I’d support it being on the ballot so the voters can decide.”
On Aug. 8, the Council voted 4-2 on to reduce its public safety property tax levy from $1.79 to $0.79 per $1,000 of assessed value if the sales tax is approved by the voters. Councilors Faszer, King, Lovelace and Riker voted in favor, while Councilors DeLaGrange and Ogier voted against the motion, Councilor Pell recused himself, and Councilor Collins did not vote because he was absent. Following the vote, Mayor Sara Bristol expressed strong opposition to the property tax reduction.
The proposed sales tax threshold begins at $2,000 and adjusts by the CPI each year. A 10% CPI increase in 2023 would increase the threshold to $2,200 beginning Jan. 1, 2024. This adjustment would occur annually without voter approval. For a $5,000 purchase in 2023, the first $2,000 would be taxed at 3% and the remaining $3,000 would not be taxed. Under this example, in 2024 the first $2,200 would be taxed at 3% and $2,800 would not be taxed.
Most products and services costing less than $2,000 would be taxed at 3%. A list of exemptions is included below.
The tax would be collected by for-profit companies, non-profit organizations, churches, individuals, partnerships, associations and business trusts. Under the ordinance, these entities are referred to as “Participants.”
There is no minimum revenue threshold for individuals and businesses. A person selling $1,000 in products during sales tax season (April to October) would be expected to collect $30 in sales tax and submit this to the county each year. He or she would receive back 5%, or $1.50, to cover the collection costs of the sales tax. A medium-sized business doing $1 million in taxable sales during the sales tax season would collect $30,000 in sales taxes and be reimbursed $1,500 to cover collection and reporting costs.
The sales tax would be cover sale of most products and services inside Josephine County. The following transactions are exempt from the proposed sales tax: groceries, prescription medicine real estate sales, rent, internet access, telephone services, motor vehicle fuel, transient lodging, new light-duty motor vehicles, tobacco products, lottery tickets, alcoholic liquor, psilocybin products or services, marijuana items, investments, gifts, public utilities and any other transactions excluded by state or federal law.
The sales tax excludes sales to “Participants” for resale to another “Participant.” This means a contractor won’t pay Home Depot sales tax for deck boards for your new deck. The contractor would charge you the sales tax for his time and materials.
The sales tax would tax business-to-business services such as legal services, tax preparation services, payroll services, plumbing services, landscaping services, etc.
A Retail Activities Tax Board (RATB) would include three persons with one from the county, Grants Pass and Cave Junction. Each will receive compensation of $200 per month. A ruling of the board could be appealed by filing a writ for judicial review with the Oregon Circuit Court.
The RATB can authorize Josephine County or the Josephine County tax collector to obtain a Participant’s tax return and supporting documentation from the Oregon Department of Revenue for compliance and enforcement purposes.
Each calendar year, every Participant would be required to make payment in full to the Josephine County tax collector on or before March 1.
The Board of County Commissioners may reduce the 3% rate, but may not increase the tax rate without voter approval.
All fines, penalties and unpaid taxes imposed or assessed under the sales tax would become liens against the Participant’s real and personal property.
The board of the directors of the Grants Pass Chamber has opposed the sales tax measure. See page 6 to read the board’s statement.
The seasonal sales tax will appear on the November 2022 ballot. Should the sales tax be approved, Josephine County would become the first county in Oregon to have a retail sales tax.
Richard Emmons is the Publisher and Editor of the Josephine County Eagle.