From the land of sky-blue waters
Are you like me? Do you think public employees should live in the jurisdiction that's paying their salary, or at least pay taxes in that jurisdiction? If so, you may share my disgust to read that a senior deputy city attorney for Portland has reportedly been faxing it in from Minnesota for a year, thus avoiding Oregon income tax.
And now she's about to get a no-bid contract that will hire her on as an outside contractor and give her a nice fat raise for the same work that she's curently doing as an employee. The city attorney's office, providing its usual leadership in City Hall arrogance, tried to ram that deal through the City Council last week as an emergency, but Commissioner Rene "The Sane One" Gonzalez apparently refused to go along with it. So now it's on the regular agenda for tomorrow's weekly bobblehead show.
The Oregonian has the story behind its paywall, but from Twitter and various Google searches, I am piecing together that the attorney in question is named Tina Richards, and the contract that's being proposed could pay her limited liability company, TMR PLLC, more than $2.2 million over the next five years. As an employee, her pay for the year 2021 was listed here at $145,717.
If she's working out of state, as is apparently the plan, Richards won't be liable for any Oregon income tax on the money she's making, either on the payroll or as a contractor.
One question somebody raised on Twitter was whether it would be legal for Richards to give legal advice to Portland from a Minnesota location if she's not a member of the Minnesota bar association. Interesting question. She was admitted to practice in Oregon in 1998 and is still licensed here. She also practiced for a while in Indiana, and so it's possible that she's still licensed there. But the Minnesota bar site doesn't show her as a member.
Anyway, the whole deal is wrong on multiple levels. At a minimum, Oregon law needs to be changed so that compensation paid to employees by the state, or by any political subdivision in the state, is treated as Oregon-source income and subjected to Oregon personal income tax, no matter where the employee lives or performs the work. As for slithering off the city payroll and signing on as a consultant to do the same work, that ought to be outlawed, too. Not that the weasels at City Hall wouldn't contort themselves all over the place to avoid such a rule. For shame.
Will any of this matter in 30, 60, or 90 days ie whenever Armageddon happens?
ReplyDeleteSally
ReplyDeleteFYI, Oregonian paywalls (like many others) can be broken via archive.ph — not that a whole lot of them are worth bothering with, but useful for the ones that are.
Meanwhile … Oregon is the embodiment of “some animals are more equal than others.”
"Compensation paid to employees by the state, or by any political subdivision in the state, is treated as Oregon-source income and subjected to Oregon personal income tax, no matter where the employee lives or performs the work". Amen. Especially for Tier 1 PERS income.
ReplyDeleteHeh heh. By going independent contractor, she will go from PERS to Keogh or whatever. But at her hourly rate, she can afford it.
DeleteShe will also have to pay the Portland Arts Tax. Poor muffin.
DeleteI believe that one applies only to Portland residents, so she won't.
DeleteAs I have learned by threats from the thirsty Portland money-scroungers, starting this year, income that comes from clients or customers in Portland and Multco is subject to their business taxes, no matter where you live.
ReplyDeleteOK, I'm dumb. Everyone I know who works with me and lives in Vancouver still has to pay state tax in Oregon. Why would Richards not be paying it?
ReplyDeleteBecause she won't be physically present in Oregon when she does the work.
DeleteTMR PLLC is a Minnesota Limited-Liability Company. Portland's contract is with the company, not the person. The City of Portland pays the Minnesota company and the Minnesota company pays the person (in some combination of wages and distributions). I'm not a tax specialist, but it would be reasonable to conclude neither TMR nor Richards has any obligation to pay Oregon taxes.
ReplyDeleteGaming the system is a lot easier for people with collage experience. The voters that develop calluses, in their work, have to carry the extra tax burden
DeleteThey can still get dinged for Portland and Multnomah county business taxes.
DeleteIf it's a single-member LLC, it is generally ignored for federal tax purposes unless the company elects otherwise. As for the city and county, if they follow the federal and Oregon tax systems, a nonresident is taxed only on locally sourced income, and the source is determined by where you were physically present when you did the work. Maybe the city and county have a different rule. But the real money is the state income tax.
DeleteYeah, the City has been sending me letters demanding I file tax returns for the years since I left Oregon (3 years), with the threat of a presumptive $1000 tax if I fail to do so. This despite the fact that the requirement to pay business tax on Portland and Multco.sourced income no matter where you live began in Jan. of this year. I thought about telling them to stuff it, because I make nowhere near the $150,000 threshold from Portland clients, but then I remembered that tax assessment and the aggressive pursuit of collections are the only things that Portland is really good at, and decided meek compliance was the path of least resistance.
DeleteI'm really not sure if it's a good idea to have Portlanders and Multnomah County residents run their government simply because of the limited talent bench. Just being real, a lot of the downtown workforce lives in Washington County, Clark County, or Clackamas County. If City of Portland's employees had to live in the City, there'd be very few capable people. I would prefer we hire people based upon merit, not location or identity.
ReplyDeleteIf City of Portland employees had to live in Portland, many of them would move back to Portland.
DeleteHow the Hell is she going to go ice fishing in Oregon- unless you're talking meth...
ReplyDelete