What’s subject to the tax
Property owners, renters and landlords
Since the county tax is only a portion of the taxes collected via property taxes, the implementation of this plan would not completely eliminate coos county residents’ property taxes; it would only eliminate the county’s portion. Property owners would still be liable for the rest of the property taxes from the various taxing districts (like those collected by the school districts, for example).
Landlords would reap the benefit of no longer having to pay property taxes on the properties they rent to tenants, however there’s no guarantee that those savings would be passed on tenants. Tenants don’t pay the property taxes directly on the properties they are renting, rather the owner of the property pays the taxes, which is taken into account by the landlord when determining how much to charge the tenant for rent.
Implications
Impact on local businesses
Since Oregon doesn’t have a sales tax, and since none of the cities within Coos County have a sales tax, the implementation of a county-wide sales tax would require businesses to implement the ability to collect and account for the tax into their systems. There could be a significant cost to those businesses to implement that. For example, most retail locations use some kind of point-of-sale system.
Point-of-sale systems include the ability to collect the sales taxes, however should a proprietor lack the ability to implement that, themselves, they could be stuck paying costs to a consultant to do that for them. The proposal floated by Commissioner Taylor includes a provision that would allow business owners to keep 5 percent of the taxes they collect to offset the cost of compliance and accounting.
Impact on tourism, residents from outside of the county
Sales Vs Property Taxes
Property taxes are levied based on the assessed value of properties within the county. The owners of the property are liable for the taxes, regardless of whether or not they live there, live elsewhere in the county, or live outside of the county. Property owners make payments directly to the county, or via escrow from their mortgage servicer. Sales taxes are collected by merchants at the time of the sale. The merchants are responsible for collecting the taxes and remiting those taxes to the taxing authority. Most sales taxes exclude basic necessities such as groceries and medicine. The idea floated by Commissioner Taylor includes the excemptions for groceries and medicine.
Impact on Coos County residents
Would local residents save money?
The question as to whether or not citizens are likely to contribute less money via a sales tax versus a property tax is still not known and subject to a bit of speculation. Per Commissioner Rod Taylor, the two percent sales tax would raise between $20 and $25 million per year. Current property tax receipts are close to $6 Million, begging the question as to who is paying the difference. For example, if one assumes that 80% of the $20-25 Million is collected from Coos County residents, the sales tax paid per resident would be between $266 and $416 per year, but it’s important to note that that is based on the number of residents, to include children. A family of four, in this example, would pay somewhere between $1064 and $1,664 per year.