Buyer Beware: Car Sales Tax & 35 Other Hikes Coming to Oregon If Transportation Bill Passes

Oregon Democrats are pushing a monster tax hike that would slam the working poor, complete with a brand new 2% sales tax on new cars, plus a 1% tax on used cars. Unbelievably, Speaker Julie Fahey’s (D) latest and greatest tax increase is now twice the size of the original, $1 billion proposal unveiled in March.

After paying a 2% sales tax on their new car in a state that currently has zero statewide sales tax, the typical Oregonian will go on to have their pockets emptied once again at the DMV with eye-watering tax increases on fees. Their titling fee will cost well over twice what it once did, and their registration fees will fully triple.

But the tax hikes don’t stop there. The new car owner will then feel the pain of a 37.5% gas tax increase with every mile they drive. To add insult to injury, the gas tax will now keep rising in tandem with inflation, year after year, allowing legislators to collect more taxes automatically without ever taking another vote.

Electric vehicle drivers are not spared. Oregonians who caved to state pressure to purchase an electric vehicle will now be charged a “road-usage charge,” complete with government location tracking and odometer reporting requirements.

To make matters worse, those in the delivery business will be subject to a special “road-usage” tax on their entire corporate fleets. The cost of your Amazon Prime subscription may go up as a result, since consumers pay the brunt of any corporate tax, state or federal alike.

“Oregonians and their families… cannot afford the 35+ new tax and fee increases included in HB 2025,” said Minority Leader Christine Drazan (R). “The last time politicians raised billions in taxes for transportation, we were promised better roads, safe bridges, and faster commutes. Instead Oregonians got billions in non-essential and questionable spending, ongoing traffic nightmares, and billion-dollar budget errors.”

In fact, Rep. Drazan and her colleagues put forth an alternative transportation funding package last month – one without a dime of tax increases. The minority’s proposal demonstrates that it is indeed possible to avoid any tax increase and keep every dollar in the pockets of Oregon families, where they belong.

As opposed to the latest laundry list of tax hikes on the poor, Rep. Drazan’s recommendations will receive a warm reception in Oregon households already struggling with the price of food and energy. Here are a few of our favorite common-sense reforms:

• $68 million: Eliminate all vacant positions at Oregon Department of Transportation. (Many of these chairs have been collecting dust for years. Taxpayer dollars should be spent on roads and bridges, not bureaucratic bloat.)
•  $39 million: Redirect money from ODOT’s civil rights division and climate initiatives. (Civil rights and climate change are not in the purview of a state transportation agency.)
• $1-2 million: Lease out unused ODOT office space in Salem. (Half of state employees work remotely. It’s high time to do something useful with that office space.)
•  $40 million: Clean 3% budget cut. (ODOT saw a 31% increase in its budget in just four years (2021 to 2025). A three percent cut today is a no-brainer.)

In the face of obvious alternatives to a $2 billion tax increase, there is no good reason to move forward with a bill that will only make Oregon an even unfriendlier place to live and raise a family.

It only takes one Democrat to put a stop to the regressive policies moving forward in committee this week. ATR urges Oregon representatives to put an end to unaffordable, regressive tax increases that have no place in this year’s budget.