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Oregon bike tax revenue ticks up, but still short of expectations

Posted by on December 17th, 2019 at 2:14 pm

New bikes at Willamette Mountain Mercantile in Oakridge. (Photo © J. Maus/BikePortland)

The latest receipts from Oregon’s bicycle excise tax show that revenue is still lower than lawmakers hoped for.

The $15 tax on new bicycles was one of several taxes passed by the Oregon Legislature in 2017 to raise revenue for transportation projects and programs. It went into effect on January 1st, 2018 and is collected at retail shops at the point of sale. It applies to all bicycles with a value of $200 and over. As part of the law, retailers must file quarterly returns with the Department of Revenue (DOR).

According to DOR, they collected about $500,000 in bike tax revenue during the 2018 calendar year. As of October 2019, they report payments so far this year of about $724,000.

These numbers show an uptick, but the totals fall short of the $1.2 million per year figure lawmakers were given prior to voting on the tax.

DOR also shared with us that so far there are 182 active bike tax accounts (retailers). That’s up from 111 that had registered as of March 2018.

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(Source: Department of Transportation Revenue Forecast)

When we last checked in on these numbers just five months after the tax went into effect, the cost to collect the tax was 61% of the total. DOR says that’s to be expected with a new tax and they expect annual collection costs to be in the $20,000 to $30,000 range starting in 2020.

The bike tax was one of three new taxes passed in 2017. In total, the State of Oregon estimates they’ll bring in $343 million per biennium by 2025. A payroll tax to pay for transit is the largest source of new revenue and is estimated to provide $217 million in the 2019-2021 biennium. Taxes on new cars and trucks will chip in about $80 million. The bike tax is tiny by comparison and is forecast to only generate $700,000 per year by 2025.

Bike tax revenue goes into the Oregon Department of Transportation’s Multimodal Active Transportation Fund. This fund was created in 2019 and was created by using 7% of Connect Oregon funds (an existing, Lottery-funded grant program) plus revenues from the bike tax.

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

I forgot we had passed this stupid tax. I’m glad my recent online bike purchase wasn’t assessed a tax.

el timito
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el timito

Interestingly, a speaker at the PSU/PBOT Traffic and Transportation class stated that if you pay property tax of, say, $3000 in Portland, only $17 goes to the City for transportation.
So when I recently bought a $550 bike I paid about the same in transportation taxes that my wife and I pay for our home.
Good thing I don’t buy a bike every year – my transportation taxes would double!
(Of course, the bike tax does not go directly to Portland’s roads.)

rick
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rick

This tax does nothing for orphan urban highways.

Shuppatsu
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Shuppatsu

Do they explain why the numbers have fallen short? Were the numbers BS to begin with? Are bike shops not assessing the taxes? Are bike shops seeing a slump in sales? If so, is the slump attributable to the tax or is it consistent with nationwide figures?

SD
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SD

Could you remind us of the administrative costs associated with this tax? Thanks

Eric H
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Eric H

But we got “skin in the game” and “seats at the table” now though, right?

Todd Boulanger
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Todd Boulanger

The “gap” is all those lost bike sales of scofflaw Oregon bike buyers crossing into neighbouring states to buy their bike free of Oregon taxes. 😉

Todd Boulanger
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Todd Boulanger

Does that list of registered bike retailers include the big box retailers? (There should be some of their adult bikes triggering the $200 threshold.)

And the article mentions a cost estimate of collection, but this does not include the cost to the the retailer to collect it (I assume).

The Dude
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The Dude

This Oregonian will never buy a bike in Oregon again.

If you enjoy riding your bike, this should be one in a long series of clues that Oregon Democrats are basically Republicans.

Middle of the Road Guy
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Middle of the Road Guy

I’m just absolutely stunned that yet another tax did not live up to expectations.

kittens
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kittens

Another in a long line of embarrassing new Oregon taxes. So bad it almost makes the argument for “small government” through it’s sheer idiocy.

Marianne Fitzgerald
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Marianne Fitzgerald

I’m about to purchase a 20″ bike for my grandson at the only local bike shop in Beaverton. It’s twice the cost as a purchase of a new bike from Fred Meyer, but I’m supporting a local business and HOPEFULLY supporting better bicycling infrastructure in the future in SW Portland and Beaverton where we live. Whether you like the tax or not, we need to pay for safe infrastructure where it’s needed and support Oregon small businesses.

q
Guest
q

Does anyone know of one person who used to complain about “bikers not paying their fair share” but no longer does?

David Hampsten
Guest

Jonathan, could you let us know what ODOT document states that Oregon expects $1.2 million in net revenue annually from the $15 bike tax, and send us a link to that document? Thanks.

Fred
Guest
Fred

Recently I was stopped at a corner on SW Capitol Hwy – the new configuration with the buffered (protected?) bike lanes. Two men in a Miata convertible pulled up beside me, waiting to turn right onto Capitol. One of the men said, “Y’all need to be paying for all of this” as he waved his hand toward the plastic wands and lines of white paint. Darned if I couldn’t remember the $15 tax I had paid when I bought my bike! Next time….

Jim Lee
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Jim Lee

The Dude
This Oregonian will never buy a bike in Oregon again.If you enjoy riding your bike, this should be one in a long series of clues that Oregon Democrats are basically Republicans.Recommended 3

..just like Barack Hussain Obama

Al
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Al

Fun fact: I got a $2500 check from the State of Oregon this year for buying an electric car. I’m here to say thank you to the 167 new bike buyers!

GNnorth
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GNnorth

I applaud Fitzgerald for buying locally but there isn’t anything wrong either with getting one from Freddies. Yes the quality of the build may be circumspect but ten year-olds are akin to a Samsonite gorilla throwing luggage around so if their bike even lasts three years in reasonable shape I would buy a lottery ticket. October visit to Ashland had me spending 35 minutes tuning up friends step kid Trek off-road they bought 18 months before but had sat in the garage for at least four months since the LBS did a poor job putting it together. Granted the parents should have taken it back for an initial check-up but few actually do.

D'Andre Muhammed
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D'Andre Muhammed

I’ve built my own last two bikes. Pieces coming from here and there. Kate Brown ain’t getting no more of my money.

joe d
Guest
joe d

I oppose this two-burrito nuisance of a tax, but what’s the point of painting a false conclusion by comparing three quarters in 2019 vs four quarters in 2018? The tax brought in nearly 50% more revenue in the first three quarters of 2019 than in all four quarters of 2018. This is more than an “uptick”. When bike shops send in their 4th quarter payments next month, the total for 2019 will likely be close to $1 million, about a 100% increase over 2018 and not that far off from the state’s $1.2 million projection.

As for the people vowing never to buy a bike in Oregon again just to spite the government over a $15 tax: that would only hurt your community and the local bike shops that are part of it.

Jason
Guest
Jason

I bought a new bike in 2019, from a bike shop. I didn’t even think twice about the petty bike tax. I guess that is because I forgot about it. My only concern is that the tax will encourage online bike purchases. I really hope we don’t see bike shops die off. I grew up in Eugene and watched bike shops come and go. Only a few stayed over time. So, I know it’s a competitive market to begin with. When you add any disincentive factor, shops struggle more.