Simply stated, the City of Portland imposes a fee called the Business License Fee (BLF) on all business transactions that occur within its city limits.
Portland and Multnomah County's BLF/BIT did not cause us to leave the city. We stayed at our Northeast Portland location for eleven years. It was, however, a significant factor in our decision to relocate outside the city when we decided to upgrade our facility.
The owner's compensation component of the BLF/BIT was particularly onerous and unfair in our case. As a professional services company with two owners and two employees we are top heavy with owners compensation. Because of this, our BLF/BIT was nearly one percent of our gross revenue; this was more than our state and federal tax combined. Firms like ours have been carrying a disproportionate burden under the current system. This is particularly troubling in that firms like ours are exactly the type of businesses Portland desires to retain. We are a non-polluting, creative endeavor paying a living wage.
A sole proprietor in Portland who earns the same wage as a sitting Portland city commissioner pays approximately $1200.00 per year in city and county taxes that the commissioner does not. Top level city bureau managers earn more than twice the current owners compensation cap. It is fundamentally unfair to tax people simply because they choose to work for themselves rather than for others.
Our move to Tigard reduced our business licensing costs from nearly four thousand dollars annually to fifty five dollars. The cost savings covers 25% of the annual mortgage payments on our new facility. We have also used the cost savings to improve our employee health benefits and invest in new equipment.
In my view, Commissioner Adams' reform proposal will stimulate the local economy and in the long term increase overall revenues. The savings that businesses like ours would realize will for the most part be reinvested locally and create more jobs.