Floyd A. O'Reilly Blog: Oregon’s new bike tax has netted just $30,000 so far this year

Monday, May 21, 2018

Oregon’s new bike tax has netted just $30,000 so far this year

The bike tax is underperforming.
(Photo: Jonathan Maus)

Receipts from the first quarter for the $15 tax on new bicycles have been tallied by the Oregon Department of Revenue.

As of May 16th, the agency says they’ve processed about $77,000 in bike tax payments. The tax went into effect on January 1st and first quarter receipts were due April 30th.

The first reporting of figures from the tax came last week from Bicycle Retailer and Industry News. They reported a total of $34,065 in gross receipts; but that figure was a bit premature because DOR had only started collecting payments last month. After the BRAIN story broke we contacted DOR asking for an updated number and an estimate of administrative overhead costs.

DOR Communications Operations Manager Joy Krawczyk clarified to us that, “The amount provided to Bicycle Retailer & Industry News was from our monthly agency financial statement and reflected bicycle excise tax payments processed as of April 30, 2018. April 30 was the due date for the first quarter of payments and returns for the new tax, so any payments we received just before, on, or after the due date may not have been included in our April financial statement.”

Krawczyk also shared that as of March 31st, the agency had spent $47,000 to administer the tax — or about 61 percent of the total collected.

Chart of estimated revenue from new taxes taken from House Bill 2017 Revenue Impact Statement.
(State of Oregon Legislative Revenue Office)

When the bike tax worked its way through the legislature in 2017 as part of the $5.3 billion “Keep Oregon Moving” transportation package, the State’s Legislative Revenue Office estimated it would raise $1.05 million and cost $50,000 per year to administer.

After the first quarter it appears the bike tax is nowhere near reaching those expectations.

Just as an example, let’s say receipts average $85,000 per quarter — as more shops report and new bicycle types become eligible for the tax mid-June — and administrative overhead decreases to $35,000 per quarter as the agency smooths out kinks associated with the new tax. That would leave us with around $332,000 in gross receipts (one-third the expected amount) minus $152,000 in administrative costs (three times the expected amount), and $180,000 in net revenue (less than one-fifth the expected amount).

Legislators have mandated that this revenue can only be used for projects outside the highway right-of-way like multi-use paths and trails similar to the I-205 or Springwater Corridor paths. If these current trends continue it appears the new bike tax would be a tiny pot that will have to be leveraged by other revenue sources and matching funds in order to build anything significant.

Bike tax receipts for the second quarter (ends June 30th) are due July 31st.

— Jonathan Maus: (503) 706-8804, @jonathan_maus on Twitter and jonathan@bikeportland.org

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