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Idaho Governor Woos Oregon and Washington State Businesses Over Tax Policy

2 min readBy: Joseph Bishop-Henchman

Idaho may have scored lower in business friendly taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. structure than its western neighbors Oregon and Washington in our State Business Tax Climate Index, but trends may change. While Oregon has no sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. and Washington has no income tax (and not having a major tax is a big advantage, since you lose all the compliance and administrative burden), Oregon has pushed through big income tax increases and Washington State is considering a sales tax increase and a bunch of business tax increases.

Idaho Gov. C.L. “Butch” Otter (R) has jumped in the fray:

Last month, for example, Oregon voters approved their legislature’s decision to raise taxes on the wealthy and on many businesses by $727 million. The immediate result was that my phone started ringing – and so did phones over at our Department of Commerce.[…]

The problem in Oregon is that folks were convinced that state government was what needed to be shored up rather than the jobs- and revenue-producing private sector for which state government is supposed to work. As a result, they’re chasing some of their cash cows to the border. And I welcome those businesses with open arms.

We now are reaching out to hundreds of Oregon businesses, and will do the same with those in Washington if the legislature there follows Oregon’s lead. We aren’t offering many bells and whistles, but what we can offer is a business-friendly State government, a highly qualified and motivated work force, and communities where people understand that while government cannot be the solution to their problems it can and must be a champion for their own solutions.[…]

For those Oregon businesses facing a decision about whether to lay off employees or close their doors entirely, I have a proposal: Move to Idaho. The Tax Foundation rates our corporate tax burden at 17th in the nation, compared to Oregon’s ranking of 31st. Our individual tax burden is lower, too. Those kinds of numbers can make a real difference to a bottom line.[…]

Gov. Otter notes correctly that Idaho’s score on the corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. category of our Index is 17th, beating both Oregon and Washington State.

More on Idaho here.