For Salem, Oregon Credit Unions: New Payroll Tax Details
Posted by Pam Leavitt on July 20, 2023
The Salem, Oregon City Council on July 10 voted to adopt an employee payroll tax. The tax, which will go into effect in July 2024, was approved by a 5-4 vote despite nearly two hours of testimony overwhelmingly in opposition.
The newly adopted ordinance, which you can read here, imposes an 0.814% tax on the wages of employees, including self-employed people, for work performed within Salem city limits. It exempts work performed at the minimum wage. The ordinance requires employers to withhold the tax at each pay period and remit it quarterly. The tax will provide additional general fund resources for the city. While the resolution indicated that funds would help with rising costs associated with public safety and homeless services, the ordinance itself broadly states it will fund “community safety.” Tracking the tax will create a significant new administrative burden for employees and employers, especially when workers have hybrid work schedules or work on the road or at various job sites outside of the city at times.
Through our membership in Oregon Business & Industry, they have shared an effort to place this new tax on the ballot. “While OBI has strong concerns about the complexity, vagueness, and size of this tax, it is most concerned that the decision was made without voter participation. As a result, last week OBI had a petition and signature sheets approved to move forward with sending this to the voters on the November 2023 ballot. OBI did so with the support of the Salem Chamber of Commerce. Approximately 4,000 valid signatures from registered voters in Salem are due Aug. 9.”
Please contact Pam Leavitt ([email protected]) for more information on the petition.