Business leaders in Oregon have been sounding the alarm over Portland’s increasing taxes in recent years.

While voters and lawmakers have levied taxes against high earners, companies and other groups in the city, some leaders say businesses and workers have to scramble to keep up. Many argue that the growing burden has led to a poor business climate in Portland and beyond.

State data reveals Oregon’s economy is showing warning signs. Unemployment is at 5.2% — not a shockingly high number, but it’s steadily ticked up from around 4% just over a year ago.

Oregon leaders, including Gov. Tina Kotek, have pointed to various metrics to highlight the weakening business atmosphere. The financial media network CNBC, for example, put Oregon as the 39th state in the country for its business environment. The same study put Oregon 43rd for cost of doing business and 47th for business friendliness.

The only category Oregon scored in the top 25 was workforce.

More recent numbers from the think tank Tax Foundation put Oregon 35th in its 2026 State Tax Competitiveness Index. Researchers at the foundation write that instead of a sales tax, like most states, Oregon “has a complex and progressive individual income tax system.”

The result, researchers note, is that when local taxes are combined, Portlanders are taxed at a high rate, slightly higher even than workers in New York City.

Trade groups and other organizations representing Oregon businesses are hardly surprised. The Oregon Business Plan, which has researched and proposed public sector policies to boost economic growth in the state for more than two decades, noted in a report last month that Oregon is becoming a harder and harder place to do business. And it’s not just how much they’re paying in taxes.

“Growing regulatory burdens and slow, uncertain permitting times make it hard to plan,” the authors wrote. “Those wishing to expand have trouble finding suitable land.”

The report comes two years after Gov. Kotek called for a task force to assess what downtown Portland needs in order to rebound from the pandemic. Economists often consider downtowns as a bellwether for the financial health of a city or region.

The committee on taxes found that in 2023 Portland area businesses paid $1.4 billion in taxes, up from $781 million in 2019, the year before the pandemic devastated the economy.

“The growth was only in part due to a growing tax base, but primarily due to new taxes and increased tax rates,” the group wrote in its report to the Governor. “Key areas of growth: the gross receipts tax, the corporate income tax, and property taxes.”

Here’s some of the changes in taxes the working group identified that Portland businesses need to be aware of, in order of newest to oldest, since the pandemic radically changed the make-up of downtown’s economy:

• 2023 — Payroll tax goes into effect to fund Paid Leave Oregon for most employers in the state
• 2021 — In Portland, implementation of a parks property tax, and in Multnomah County property tax to fund the library system
• 2020 — Tax to fund Preschool for All program is passed, affecting workers who make more than $125,000 annually
• 2020 — Corporate activity tax put in place
• 2020 — Multnomah County businesses’ income tax rate increases from 1.45% to 2%
• 2019 — Portland enacts gross receipts tax affecting large businesses with gross income above $1 billion

At a minimum, the new taxes can be confusing and time-consuming for taxpayers to keep up with. Andrew Hoan, president of the Portland Metro Chamber, told OPB that in worse cases, the slew of taxes is pushing business out of the central city. That’s a statewide problem, he said, because nearly 60% of Oregon’s economy is dependent on business activity in Portland.

“If we don’t thrive,” Hoan said. “The rest of the state will see its overall tax revenue — to be able to solve the big challenges — decline.”

Changing the tax structure would be a start, Hoan said, in restoring the competitiveness Oregon enjoyed before the pandemic. Simplifying regulations and making it easier to access land for expansion could also help sway more companies to invest in the state.

Right now, Hoan said businesses have a hard time making a case for why they should expand in Portland.

“So when making decisions about where to invest, grow, and retain employees, there’s not much of a financial decision to make,” Hoan said. “It’s been made for them — and that decision is that it is better to go to other places and invest than it is here. It’s better to employ people in other places than it is here.”

News Source : https://www.opb.org/article/2026/01/14/portland-taxes-pandemic/