Amend Business License Law Code to increase the business license tax gross receipts exemption (amend Code Section 7.02.400)

The City of Portland ordains. Section 1. The Council finds: The Business License Tax (BLT) gross receipts exemption is intended to allow small businesses to retain critical capital to help them flourish. The BLT gross receipts exemption has been $50,000 since January 1, 2007. The value of the exemption for helping small businesses flourish has eroded over time as a result of inflation. Based on tax year 2023 data, the most recent year for which complete data is available, increasing the BLT gross receipts exemption from $50,000 to $75,000 beginning in tax year 2026 is estimated to give 5,800 businesses $1.2 million in tax relief, an average of $207 each. Based on tax year 2023 data, the most recent year for which complete data is available, increasing the BLT gross receipts exemption from $75,000 to $100,000 beginning in tax year 2027 is estimated to give an additional 4,200 businesses $1.2 million in tax relief, an average of $286 each. 65% of the businesses getting relief are sole proprietors. The Revenue Division administers the Multnomah County Business Income Tax (MCBIT) along with the City's Business License Tax. The MCBIT gross receipts exemption threshold is currently $100,000. The Governor's Tax Advisory Group, in its August 2025 report, provides several tax reform options for consideration. One of those options is to increase the BLT gross receipts exemption. Increasing the City's BLT gross receipts exemption threshold to conform to the MCBIT gross receipts threshold will increase small business profitability and reduce complexity and taxpayer confusion. NOW, THEREFORE, the Council directs: Amend City Code Section 7.02.400 as shown in Exhibit A.