Business License Tax CEO Pay Ratio Surtax

At a glance

Based on uploaded (human-made) captions.

What: document 2026-348, an ordinance amending Business License Law Code sections 7.02.400 and 7.02.500 to add new compensation ratio tiers (including a 50-to-1 to 100-to-1 range), raise the CEO pay ratio surtax on large publicly traded companies, and raise the gross receipts exemption (to $500,000 from $75,000 as presented October 8; the October 15 discussion described it as rising from $100,000 next year), which would relieve about 18,000 small businesses. Councilor Green and Councilor Morillo are the primary sponsors; the surtax builds on the 2016 policy written with Councilor Novick.
Where it stands: heard October 8 (sponsor presentation, invited speakers and all oral testimony, more than 40 people signed up) and October 15 (deliberation) in the Finance & Governance Committee. No vote. The item is continued to a date to be set; Kanal and Novick are next in the queue. The written record is open (251 comments, 81 percent in support, per Green).
Contested: supporters call it a popular response to federal tax cuts; skeptics cite the lack of polling, the unknown count of newly covered firms, lawsuit and referral risk, and effects on grocery and big-box retailers.

Applies only to publicly traded corporations with at least $100 million in revenue that sell in Portland, so it cannot be avoided by relocating (Councilor Morillo, policy advisor Eric Dean).
Revenue division estimate about $72 million a year, about $33 million net of exemptions, with real yields varying from year to year (Green).
More than 60 community and business organizations and over 50 small business owners have endorsed it; Council President Dunphy urged colleagues to find a path forward.

The exemption from the Business License Tax would rise to $500,000 in gross receipts, exempting an estimated 18,405 small businesses (97.8 percent would see their tax go to zero) with an average saving of about $900, or about $14 million that stays in the local economy.
The surtax is a percentage added to the 2.6 percent tax on net income of roughly 405 large publicly traded companies that report a CEO pay ratio to federal regulators. It now starts at 100 to 1 (a 10 percent surtax); the proposal starts at 50 to 1 (25 percent, an effective rate of 3.25 percent) and, from 100 to 1 upward, sets the surtax percentage equal to the ratio, reaching 500 percent at 500 to 1 and above.
Sponsors argue companies cannot avoid it by leaving, because the tax follows sales into Portland, and that a firm can cut its bill by raising worker pay or lowering CEO pay.
Revenue: about $72 million a year from a prior-year counterfactual; about $33 million a year after the city economist and the Chief Financial Officer set aside two volatile large payers. Staff said one taxpayer paid over $20 million last year. Green paired it with the Business License Tax Stabilization Reserve. As drafted, the exemption would not take effect until the year after new revenue starts.

Invited speakers: a Goose Hollow cafe and bookstore co-owner, and Sarah Anderson of the Institute for Policy Studies, who said the 2016 surtax has raised about $5 million a year, that San Francisco adopted a pay ratio tax in 2020, and that expanding it makes sense.
Most testifiers supported the ordinance: small business owners and accountants, the city's professional workers union, a laborers union local, the Oregon Black Worker Center, Portland Jobs with Justice, a housing coalition, a music advocacy group and a neighborhood business alliance. Some asked that part of the revenue go to affordable housing, transit and infrastructure, and one suggested a small business tax credit.
A handful opposed or hedged: it belongs at the federal level; costs will be passed to customers (one estimate about $500 a year for a family of four); and the city should audit spending and streamline permitting first.

Novick: no polling or allies in place; a ballot referral is realistic after San Francisco's surtax expansion lost at the ballot this year.
Councilor Pirtle-Guiney: no count of newly covered firms, possible combined legal risk with the pending lawsuit over the arts tax, no defensive campaign plan, and a pending 2028 statewide revenue measure.
Councilor Smith: removing 18,000 businesses from the rolls, executives restructuring pay, and a pro-business image problem.
Councilor Ryan: possible store closures in food deserts; open to the small business relief if separated. Green answered that grocery margins are thin and the tax would be about $0.18 per $100.
Jonas Biery, Chief Financial Officer: no polling commissioned and no analysis yet of avoidance, relocation or newly covered firms; his office offered to do it.

Staff follow-up on counts of newly covered firms and a risk-adjusted revenue estimate.
Resumes at a later Finance & Governance Committee meeting.

About 223 minutes across 2 meetings (from transcript timestamps; approximate).

Meeting	Minutes
2026-10-15 - Finance & Governance Committee (Whole)	60
2026-10-08 - Finance & Governance Committee (Whole)	163

2026-10-15 - Finance & Governance Committee (Whole) - Green, Novick, Dunphy, Pirtle-Guiney, Smith, Morillo, Ryan and Green again discussed the ordinance; Biery and Dean answered questions; no vote, continued.
2026-10-08 - Finance & Governance Committee (Whole) - Sponsor remarks by Green, Morillo, Koyama Lane, Avalos and Dunphy; Green's presentation and invited speakers; technical questions from Smith, Zimmerman and Novick answered by Biery; all oral testimony heard (overwhelmingly in support); no vote.
2026-09-23 - Work Session - Green announced he and Morillo had introduced an update, expected to raise about $72 million a year on average with small business relief, for the Committee of the Whole on October 8.