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


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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