March 14, 2004
(Updated) Leonard Claims 9,000 Businesses Avoiding Business Income Tax
As Much As $10 Million May Be Involved
Note: This post has been updated. Any and all updates appear at the end of the original post.
Readers may recall that at the beginning of March, Commissioner Randy Leonard announced that the Bureau of Licenses would be cracing down on Portland business not paying their taxes. As The Oregonian reported at the time:
Commissioner Randy Leonard said Monday that he estimates the amount of uncollected business license fees could be as high as $4 million.
"We want to give fair warning that the rules are going to be enforced," said Leonard, who is running for re-election. "The problem is the bureau is not following its own processes."
That announcement came in the aftermath of wrangling with at-that-time Bureau chief Jim Wadsworth and an audit of the Bureau. Willamette Week has reported on the audit and the controversy over the director.
(In addition, Phil Stanford of the Portland Tribune has been reporting on an investigation into just who at the Bureau of Licenses blew the whistle on activities there.)
In his early March news release, Commissioner Leonard announced what he was calling The Director's Challenge and said, "For those businesses that have evaded City taxes and allowed responsible businesses to carry their water -- the honeymoon is over."
Late this evening comes word that Leonard claims to have identified up to $10 million in uncollected business taxes, spread amongst more than 9,000 licensed businesses, as well as a number of unlicensed businesses.
"This is an alarming figure," says Commissioner Leonard in a news release, "The information we have indicates that the lack of enforcement in the past has caused some businesses to view the City's business income tax as voluntary."
Leonard says the "absence of enforcement is now over" and that he expects "non-paying business' view to change dramatically."
In addition, the Bureau of Licenses has begun examining information from Fire & Rescue, Water Bureau, and the Bureau of Development Services in an attempt to track down unlicensed businesses. According to the release, the first effort identified more than 700 such unlicensed businesses operating in Portland.
"We will be matching more information from City bureaus," says Leonard, "as well as State and Federal records to make sure that all Portland businesses pay their fair share."
It is hoped that cracking down on both businesses avoiding their taxes and businesses operating without a license will lead to a significant reduction in overall business tax rates.
Update
Following up on the Phil Stanford columns, Monday's Oregonian also has a glimpse at the Katz/Leonard spat over who leaked information to Willamette Week. We just want to weigh in on this bit:
"I am the mayor of this city, and the buck stops here," Katz said. "If something is going on in that bureau that's illegal, I have the responsibility of investigating it."
Perhaps the issue should be that, for better or worse, it seems that no one was investigating it at all prior to Leonard's interest in the matter. We've ourselves chided Leonard before on one issue or another, and no doubt will do so again. But why is this turning into a story about the Mayor being peeved at whistle blowing (or leaks, whatever anyone wants to call it) rather than a story about how this problem apparently existed for some time with no one in a position of power with the City doing a damned thing about it?
Comments (1)
Alicia Salaz on 15 Mar 2004
9,000 businesses at $10,000,000 means an average of slightly over $1100 a pop, correct? That seems rather significant.
I'd like to know why it takes outside investigative reporting to get anybody in the city to *notice* this kind of failure in tax collection. How long has this lack of enforcement existed? Long enough to span 1 or more budget/revenue projections/reviews?
Alicia