House Vote on Unemployment Insurance Tax Relief Triggers Movement to State Senate
FOR IMMEDIATE RELEASE: April 16, 2021
Greg Astley, Director of Government Affairs, ORLA
503.851.1330 | astley@OregonRLA.org
Jason Brandt, President & CEO, ORLA
503.302.5060 | firstname.lastname@example.org
Wilsonville, OR– The Oregon House of Representatives voted overwhelmingly to move forward with bipartisan legislation which would provide millions in unemployment insurance tax relief for some of Oregon’s hardest hit industries.
House Bill 3389 passed the Oregon House and will now move to the Senate for ongoing deliberation. The bill accomplishes a number of priorities for Oregon’s hospitality industry with the most important component being the removal of 2020 and 2021 employment data from the formula used to determine an employer’s applicable tax rate, starting in 2022.
“We would like thank the leaders who have signed on to support this bill as sponsors and their ongoing work to shepherd it through the legislative process,” said Jason Brandt, President & CEO for the Oregon Restaurant & Lodging Association. “The deferral and forgiveness components could be stronger for this year given the impact of government restrictions on industry employment options. Having said that, the big win will prove to be solving the tax hike problem for years 2022 through 2024.”
Unemployment insurance taxes are paid entirely by Oregon employers to fund Oregon’s Unemployment Insurance Trust Fund which remains the healthiest in the nation. One third of unemployment insurance taxes for 2021 can be deferred for employers with an increased tax rate of half a percent or more. If the employer’s tax rate increased more than 1 percent to 1.5 percent, 50 percent of the deferred tax would be forgiven. For tax rates which increased more than 1.5 percent to 2 percent, 75 percent of the deferred tax would be forgiven. And for employers who had a tax rate increase of more than 2 percent, the full deferred amount would be forgiven.
“We know this legislation if passed has the potential to save hospitality employers tens of millions of dollars this year alone,” said Greg Astley, Director of Government Affairs for the Oregon Restaurant & Lodging Association. “That amount pales in comparison to the real impact of the relief in future years. If we can erase 2020 and 2021 from upcoming calculations as proposed in the legislation, it will have a direct impact on our industry recovery efforts.”
The bipartisan Chief Sponsors of the bill in the house include Representatives Paul Holvey, Daniel Bonham, and John Lively. The bipartisan Chief Sponsors in the State Senate include Senators Bill Hansell and Chuck Riley.
For more information on the efforts of the Oregon Restaurant & Lodging Association please visit OregonRLA.org.
The Oregon Restaurant & Lodging Association is the leading business association for the foodservice and lodging industry in Oregon, which before COVID-19 provided over 180,000 paychecks to working Oregonians.
A new law signed in late December 2020 makes hospitality businesses eligible for an employee retention tax credit, even if they received a PPP loan. Now, for any calendar quarter between March 13 and Dec. 31, 2020, a restaurant with 100 or fewer full-time employees may be able to access the Employee Retention Tax Credit (ERTC) of up to $5,000 per employee.
And, for the first two quarters of 2021, Jan. 1–March 31, and April 1–June 30, businesses with 500 or fewer full-time employees may be able to access ERTC of up to $7,000 per employee per quarter.
Read more from the National Restaurant Association: Big tax credits to restaurants could support employee retention
FAQ on the Employee Retention Credit
(The following information provided by Cross Financial)
The eligibility criteria outlined below is referring to the Employee Retention Credit as it is revised in Bill HR 133, Taxpayer Certainty and Disaster Tax Relief Act of 2020, signed December 27, 2020. This went into affect January 1, 2021 and ends June 30, 2021.
While the IRS has yet to update their webpages on the ERC, the changes outlined in the bill are as follows:
Employers need to make sure they do not claim wages that were used for family leave, PPP or other Cares act related credits. In other words, no double dipping.
Employee Retention Credit 2020 (ended Dec 31, 2020)
An employer with one employee making $12,000 within a quarter would be permitted to use 50% of $10,000 so the max annual employee limit of $5,000 against applicable employment taxes, if there was not enough taxes to offset against, a refund would be calculated at the time of filing form 941, or a refund can be requested earlier by filing form 7200.
1 Employee x $12,000 in quarterly wages = $12,000
$12,000 - $10,000 (max qualifying wage amount) = $10,000
$10,000 x 50% (eligible credit percentage) = $5,000 employee retention credit (ERC)
$5,000 in ERC - $ (employment taxes) = Refund amount if credit exceeds employment taxes for the quarter.
Employee Retention Credit 2021 (ends June 30, 2021)
The Employee Retention Credit as it is revised in Bill HR 133, Taxpayer Certainty and Disaster Tax Relief Act of 2020, signed December 27, 2020 outlines updates for the calculation of the ERC. This went into affect January 1, 2021 and ends June 30, 2021.
An employer with one employee making $12,000 within a quarter would be permitted to use 70% of $10,000 so the max quarterly employee limit of $7,000 against applicable employment taxes. If there is not enough taxes to offset against, a refund would be calculated at the time of filing form 941, or a refund can be requested earlier by filing form 7200.
1 Employee x $12,000 in quarterly wages = $12,000
$12,000 - $10,000 (max qualifying wage amount) = $10,000
$10,000 x 70% (eligible credit percentage for Q1) = $7,000 employee retention credit (ERC)
$7,000 in ERC - $ (employment taxes) = Refund amount if credit exceeds employment taxes for the quarter.
Property tax season is upon us, and many property owners will be paying very close attention to their bills in 2020. Due to Oregon’s unique property tax laws, often the real market value and the assessed value of a property are very different, which can result in bills increasing even if the real market value of a property dropped in the year assessed.
If you want to appeal your property taxes, there are three general reasons for filing:
Unfortunately, these kinds of appeals do not consider financial distress.
To appeal, you must file your petition by December 31st with the Board of Property Tax Appeals (BOPTA) clerks in your county. To see contact information for clerks in each county, click here. Be sure to visit your county’s website for the correct appeal forms and fee information, or contact the clerk for them.
Appeals are reviewed by your county’s Board of Property Tax Appeals, made up of members from the community appointed by your county’s Commissioners. Appeals are typically heard by the Board between February through April. If you disagree with their valuation decision, you can then appeal to the Magistrate Division of the Oregon Tax Court by filing forms and paying a fee. To appeal beyond that, this chart has more information on where and when you must file an appeal—note that some of these dates may be extended by emergency declarations due to COVID-19.
If you have a special appeal situation, for example, needing to contest previous assessment years, read more guidance from the Oregon Department of Revenue on how to file an appeal.
More information is now available on the “Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act” released earlier this week by Senate Republicans. As a reminder, the House introduced the HEROES Act proposal in May, which passed along party lines. Discussions are expected to now begin in earnest as Congress faces the July 31 deadline for enhanced pandemic unemployment insurance benefits.
Part of the Republican proposal would reduce these benefits from $600 per week to $200 per week on top of state administered aid until the end of September at which time the maximum benefit will be 70% of the recipient current wages -- but this will be a starting point for the negotiations.
Read the National Restaurant Association’s summary of the proposal and the American Hotel and Lodging Association’s analysis of the HEALS Act.
Many of the hospitality industry’s priorities are included in the HEALS Act, including:
If you haven't yet, please take action on the National Restaurant Association's Blueprint for Restaurant Revival and/or the American Hotel and Lodging Association's Hotel Priorities Day of Action, thank you!
New research shows coronavirus continues to devastate restaurant industry
New research from the National Restaurant Association indicates that the restaurant industry has lost $120 billion in sales during the last three months due to the impact of coronavirus in the United States. State mandated stay-at-home policies and forced closures of restaurant dining rooms resulted in losses of $30 billion in March, $50 billion in April, and another $40 billion in May.
The latest operator survey conducted by the NRA drew more than 3,800 responses, illustrating the extensive damage to restaurant businesses since the outbreak began. It found that the restaurant industry, which experienced the most significant sales and job losses of any industry in the country in the first quarter of 2020, expects to lose $240 billion by the year-end.
New report by Oxford Economics with state-by-state TLT revenue breakdown
As a result of the sharp drop in travel demand from COVID-19, state and local tax revenue from hotel operations will drop by $16.8 billion in 2020, according to a new report by Oxford Economics released today by the American Hotel & Lodging Association (AHLA).
Hotels have long served as an economic engine for communities of all sizes, from major cities, to beach resorts, to small towns off the interstate—supporting job creation, small business opportunities and economic activity in states and localities where they operate. Hotels also generate significant tax revenue for states and local governments to fund a wide array of government services. In 2018, the hotel industry directly generated nearly $40 billion in state and local tax revenue across the country.
Oregon is expected to see a total state and local tax revenue loss of $171.7 million. Download the AHLA/Oxford Economic Report of the state-by-state breakdown for tax revenue impact and revenue loss. These tax impacts represent the direct tax revenue decrease from the severe drop in hotel occupancy, including occupancy, sales, and gaming taxes. These figures do not include the potential, significant, knock-on effects on property taxes supported by hotels (nearly $9B).
At their most recent meeting, the Oregon Restaurant & Lodging Association (ORLA) Board of Directors voted unanimously (with 1 abstention) to support a legislative bill which will originate from Governor Brown’s office in support of a permanent 1.8% statewide lodging tax rate during the 2020 Oregon Legislative Session. Revenue raised by the statewide lodging tax is invested in Travel Oregon’s efforts to strengthen the economic impact of our state’s tourism industry. Oregon’s statewide lodging tax is currently collected at a rate of 1.8% with a reduction in the rate scheduled to take effect as of July 1, 2020 to a permanent rate of 1.5%.
“We appreciate Governor Brown’s proactive outreach to meet with ORLA and some of our key lodging stakeholders in person to discuss the merits of keeping the statewide lodging tax rate at 1.8% permanently,” said Jason Brandt, President & CEO of ORLA. “Our goals for lodging tax rate structures in Oregon are two-fold – protecting all statewide lodging tax resources to create return on investment for the industry through the efforts of Travel Oregon and protecting local lodging tax reforms passed in the 2003 Legislative Session.”
Oregon continues to experience healthy growth in tourism spending logging our ninth consecutive year of industry growth in 2018. Compared to 2017, visitor spending was up 4.2% reaching a record $12.3 billion. Industry employment was also up year over year by 2.9% to approximately 115,400. Year over year, hotel room revenue increased by 4.4% as well.
“We have seen firsthand what strategic investments in tourism promotion can do when industry tax dollars are put to their most effective use,” said Brandt. “With many other competing priorities in the Capitol, it is essential the association protects the appropriate use of these dollars at both the local and state levels. The economic impacts we are seeing are significant not just for our industry but for our public sector partners as well.”
The U.S. Travel Association tracks statewide economic impact throughout the country and assists states in quantifying the value of year over year tourism growth. The most recently available data notates Oregon’s tourism growth at 5.3% when comparing 2016 to 2017, further substantiating the value of healthy tourism growth for Oregon’s public sector. From 2016 to 2017, Oregon experienced visitor spending growth of $652 million. That increase in spending and associated payroll income tax increases equates to as many as 410 firefighter positions, 380 police officer positions, or 380 teacher positions.
ORLA continues to focus on the protection of local lodging tax dollars for tourism promotion and tourism related facilities in addition to support given to Governor Brown’s upcoming legislative bill for the statewide resource. Oregon’s local lodging tax structure can be complicated with over 110 different city and county jurisdictions collecting a transient lodging tax outside of the 1.8% statewide tax. Important guidelines have been in place for the past 16 years for how local lodging tax dollars can be spent. To clarify those parameters, ORLA recently produced a new instructional video to assist all stakeholders and the general public in better understanding the rules which govern local lodging tax resources.
The new video specific to local lodging taxes (not to be confused with Oregon’s 1.8% statewide lodging tax) can be viewed here:
For more information about the Oregon Restaurant & Lodging Association’s policies on transient lodging taxes, please reach out to Greg Astley, ORLA’s Director of Government Affairs, at email@example.com via email.
NOTE: This position statement was drafted by local restaurateurs and foodservice operations doing business in Hood River County and as a result reflects the official position of our statewide association on their behalf.
Hood River County needs a solution to their budget shortfall, but this is an ill-conceived way to do it. There is still a three-year runway to find a financial solution and this measure is fundamentally flawed. Measure 14-66 is bad for Hood River County for the following reasons:
Bad for Businesses
- Entire tax burden carried by just one business segment – this is not a fair tax.
- Restaurants are seasonal and already struggle in the winter.
- Already hit by massive cost increases from higher minimum wages and unequal share of business property taxes.
- Restaurant sales taxes are shown to shift demand to large corporate chains and grocery stores, hurting local restaurants and farms.
- Tax is complex and hard for small restaurants to implement and comply with.
Bad for Workers
- Will reduce overall income and overall employment opportunities.
- Will reduce tip income as customers will tip less to offset additional tax cost.
- Restaurant employees already struggle with affordable housing and this will compound that, especially in winter months.
Bad for Residents
- Residents will shoulder most of the tax burden as they eat in restaurants all year long. Tourism is only a factor for a few months of the year.
- Residents want to support and access local farmers and locally sourced food. This tax creates a headwind for that.
- Restaurant sales plummet during economic downturns, making this an unstable source of income for the county.
Let’s ask Hood River County to bring a fair and sustainable option for raising these funds.
Business Association Letter to the Revenue Committees
The Oregon Restaurant & Lodging Association is one of 22 business associations who signed the following letter submitted to the revenue committees on March 21, 2019.
As representatives of Oregon’s leading private-sector employers, we recognize that the Legislature intends to pass significant new taxes this year, most of which will fall on Oregon’s businesses, small and large.
As we consider tax proposals, our organizations will be guided by the following principles: