Study Shows Impact of Gross Receipts Taxes

As Oregon voters are set to decide on a gross receipts tax in November with Measure 97, a new study shows that these taxes can drive revenue for the state, but hurt the economy.

Economist Nicole Kaeding authored the study and said that nine states have enacted a gross receipts tax of which, four have rescinded the tax and others are revisiting them.

“Gross receipt taxes tend to result in higher prices for consumers and they tend to result in fewer job opportunities for individuals meaning fewer jobs created, fewer jobs expanded, lower hours, lower wages, lower benefits.”

Gross receipts taxes can generate a lot of revenue for states however, one of the selling points supporters are pushing about Measure 97.

Kaeding said usually gross receipts taxes are between one-quarter to one-half percent where the law in Oregon would be 2.5 percent.

“Be cautious with Measure 97. I think this would be quite a dangerous tax increase if adopted with a lot of dangerous economic effects.”

The full report can be found on the Tax Foundation website.

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