Remember when Oregonians were told that Measure 67 would affect only Big Out-of-State Banks and Walmart? Remember when farmers were told the higher taxes wouldn't hit them?Well, it looks like the chickens have come home to roost.
The Capital Press reports that Oregon agricultural cooperatives face extensive tax hikes this year thanks to Measure 67, the corporate tax increase voters approved in January.
The measure, which is retroactive to 2009, in some cases will add $100,000 to a co-op's taxes, said Dave Buck, a partner in AKT CPAs of Salem.
"One co-op that just did the math said they will be cutting three to four to five positions," Buck said.
Others, such as Norpac Foods, are planning to absorb the cost.
"We have to compete in the world market, so we will probably just absorb that. And ultimately our patrons (members) will absorb that because we can't just pass on that cost to the market," Norpac CEO George Smith said.
"There is a double tax going on when you consider the members have all been taxed on their individual profits," Buck said.
"We have to treat sales we make of our patrons' products as sales, and a member has to treat his sales to Norpac as sales," Smith said. "It's doubling up their tax burden."
"A cooperative is meant to be a pass-through entity, which means patronage-based sales or income should be taxed at the member level only," said Heidi Luquette, communications manager for Tillamook County Creamery Association.
"As it stands, cooperatives are essentially double taxed" under Measure 67, she said.
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