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Label:
Ordinance
Amend Business License Law Code to increase the business license tax gross receipts exemption (amend Code Section 7.02.400)
Passed
Amended by Council
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.
Exhibits and attachments
An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved
in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)
Passed as amended by Council
Auditor of the City of Portland
Simone Rede
Impact Statement
Purpose of proposed legislation and background information
This ordinance will increase the gross receipts exemption threshold and provide small businesses within the City some level of economic relief. It will align with Multnomah County's business income tax easing tax administration and taxpayer compliance.
Financial and budgetary impacts
Increasing the BLT gross receipts exemption from $50,000 to $75,000 beginning in tax year 2026 will decrease revenue by $1.2 million beginning in fiscal year 27-28. Increasing the BLT gross receipts exemption from $75,000 to $100,000 beginning in tax year 2027 will decrease revenue by an additional $1.2 million ($2.4 million total) beginning in fiscal year 28-29. No additional costs or staffing is needed to make this change.
Economic and real estate development impacts
Not applicable.
Community impacts and community involvement
This ordinance will reduce the initial impact of the BLT on startups and other small businesses within the City providing them an opportunity to grow or retain more profit. Many small businesses are started by individuals in neighborhoods with under-served populations.
100% renewable goal
Not applicable.
Economic and real estate development analysis
Analysis provided by Prosper Portland
An Economic and Real Estate Development Impact Analysis was not submitted for this proposed action.
This policy will positively affect Portland's economy in three ways:
- This ordinance will increase the gross receipts exemption threshold and provide small businesses within the city some level of economic relief.
- After full phase-in over two years, it will align the Business License tax with Multnomah County's business income tax streamlining both tax administration and reducing paperwork for small businesses.
- Will appropriately update the exemption to better account for almost twenty years of inflation.
- This 100% increase to the exemption will benefit Portland's small business who continue to operate through inflation, safety challenges, and general economic uncertainty.It will allow entrepreneurs to invest in their employees and businesses with greater stability.
Financial and budget analysis
Analysis provided by City Budget Office
This ordinance will reduce Business License Tax revenue by approximately $1.3 million annually beginning in FY 2027-28 (reflecting the increase in the gross receipts exemption from $50,000 to $75,000 in tax year 2026) and an additional $1.2 million annually beginning in FY 2028-29 when the exemption increases to $100,000. Once fully phased in, the total ongoing revenue reduction is estimated at approximately $2.5 million per year.
Document history
Document number: 2026-077