Authorize City Attorney to represent the City in legal action concerning a public records request and disclosure of confidential taxpayer information

WHEREAS, Oregon Public Broadcasting requested the names of all businesses that paid into the Portland Clean Energy Fund and the amount paid by each business. WHEREAS, the Clean Energy Surcharge is imposed under the Business License Law in Portland City Code (PCC) 7.02.500 F and reported on Business License Tax returns. Being imposed at a rate of one percent of Portland sales, sharing this information would result in disclosure of Business License Tax financial information; both the amount of the surcharge and, indirectly, Portland sales. WHEREAS, PCC 7.02.230 makes it unlawful for any City employee, agent or elected official to divulge, release or make known any financial information submitted or disclosed under the Business License Law unless otherwise required by law. PCC 7.02.230 imposes confidentiality provisions similar to those found in federal and Oregon tax return confidentiality law. WHEREAS, Multnomah County District Attorney Mike Schmidt found that Oregon’s public records law supersedes PCC 7.02.230 and there is no general or specific public records exemption for local tax return or other sensitive information from being provided in response to a public records request. WHEREAS, Multnomah County District Attorney Mike Schmidt found that Oregon’s public records law only provides a narrow exemption from disclosure of local government tax return information in Oregon Revised Statute 192.345(5) related to fees paid by an entity. The exemption only applies to a record that associates a business’ name with specific financial information. WHEREAS, Multnomah County District Attorney Mike Schmidt has ordered the City to disclose the information requested in two separate files: the names of businesses that filed and paid the Clean Energy Surcharge and the disassociated dollar amounts of the surcharges paid. Disclosing the names of businesses that filed and paid the Clean Energy Surcharge will reveal confidential financial information. To be on the list of Clean Energy Surcharge taxpayers, a taxpayer must have gross income of $1 billion globally and $500,000 in Portland. WHEREAS, publicly available financial information exists, such as reports filed with the federal Securities Exchange Commission for many of the businesses subject to the Clean Energy Surcharge. Cross referencing this information with information released by the City of Portland in response to this request may expose C-corporations' local liabilities and market share. WHEREAS, if disclosure of tax return information is required, it may result in the loss to the City of access to tax return data currently received from the Internal Revenue Service and the Oregon Department of Revenue due to their confidentiality laws. WHEREAS, the loss of tax return data from the Internal Revenue Service and the Oregon Department of Revenue will harm the City’s tax compliance activities which will reduce tax revenues and impact the City’s ability to fund public services. WHEREAS, while the records request before the City today concerns only the Clean Energy Surcharge, nothing prevents a future public records request from any member of the public for other business or personal income tax records held by the City for its own programs and those held on behalf of other local jurisdictions such as Multnomah County. This includes both personal and business income tax information. WHEREAS, Multnomah County objects to the potential future disclosure of its taxpayers' confidential income tax records. WHEREAS, disclosure of tax return information may cause harm to taxpayers in the form of identity theft. WHEREAS, disclosure of tax return information may cause harm to taxpayers where incorrect or inaccurate information could result in problems such as a lender refusing to lend or an insurer refusing to insure the taxpayer. WHEREAS, disclosure that causes harm to taxpayers may result in litigation against the City for violating the City’s code on confidentiality resulting in that harm. WHEREAS, the Revenue Division has received notices from over 30 businesses protesting the release of their confidential tax records. WHEREAS, if disclosure of the requested information is required, it may apply more broadly to any City documents not specifically exempted from the requirements of Oregon’s public records law. WHEREAS, disclosure of confidential taxpayer information is unheard of in any taxing jurisdiction the Revenue Division is aware of. WHEREAS, the City of Portland has gained a reputation as a high income tax municipality. Adding the inability to maintain basic and universal expectations of taxpayer confidentiality to this reputation is unacceptable. WHEREAS, the State of Oregon exempts from disclosure all taxpayer information including the information in the scope of this request. The information Portland seeks to exempt from disclosure is identical to Oregon records that are already exempt. WHEREAS, there is no logical reason that local income taxpayers should have a different level of privacy merely because their records are held by a local jurisdiction. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Portland, a municipal corporation of the state of Oregon, that the Council hereby authorizes the City Attorney to represent the City in legal action concerning public records and the disclosure of income tax returns.