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ASBC Steps Up Its Effort to End Oregon’s Water’s Edge Election

ASBC is ramping up its efforts to convince Oregon legislators to repeal Oregon’s Water’s Edge election, a law that enables corporations to prevent the state from taxing their foreign income. This law enables corporations to hide American profits as foreign revenues.

Oregon faces a $2 billion education funding shortfall for the biennial budget that starts in July of 2019. That shortfall is due in part to the decline in the share of the state’s income tax revenues paid by corporations, which is down from an average of 16 percent of the total in the 1970s to just 7 percent today.

Oregon’s education funding needs are acute. The graduation rate for Oregon’s 2016-17 high-school class was just 76.7 percent, nearly 10 percentage points below the national graduation rate, and Gov. Kate Brown is committed to raising that graduation rate. Repealing the state’s Water’s Edge election would enable Oregon to tax corporation’s offshore income. One study estimated that offshore tax sheltering costs Oregon about $225 million a year.

ASBC and its partners—NRS, Inc. (an ASBC member), SalesFactor.org, the Oregon Center for Public Policy (OCPP), and the Oregon State Public Interest Group (OSPIRG)—are actively engaging with the state legislature to promote an end to water’s edge. Under water’s edge, a corporation agrees to be taxed by the state on income earned within the U.S., but not on income earned offshore.

Source Author: 
John O'Neill
Source Publication Date: 
November 20, 2018