Tire tax traction

A bill to impose a 4% state tax on tire sales and use revenue to support rail transit and mitigate tire pollution may get a hearing Tuesday

Weird image courtesy Grok

The Oregon legislature’s Joint Committee on Transportation intends to hold a hearing Tuesday on a bill to tax the sale of all motor vehicle tires in Oregon, according to an email from a legislative staffer to Oregon Roundup today. Patrick Brennan, Legislative Analyst for the Legislative Policy and Research Office, wrote in his email the bill may not be heard Tuesday if the bill’s sponsors cannot free up their schedules to attend.

The bill, HB 3362, would impose a four percent (4%) tax on the retail sale of all new or refurbished motor vehicle tire sales in the state. The measure is sponsored by two legislative Democrats: Senator Chris Gorsek of Gresham, who co-chairs the Transportation Committee, and Representative Ken Helm of Beaverton.

Revenue from the tax, which the bill calls the “tire pollution tax,” would flow into an entirely new state account, called the Tire Pollution and Rail Transit Fund. The Oregon Department of Transportation would be required to spend two-thirds of the money in the Fund on “programs or projects to support public transportation by rail or other forms of public transportation[.]”

ODOT would be required to spend the other one-third of tire tax funds on a new “tire pollution prevention and mitigation program” intended to reduce the amount of such pollutants in Oregon waterways and to mitigate their effect on salmon and other wildlife. The bill defines “tire pollutant” as “any substance or particle derived from a motor vehicle tire that causes or tends to cause water pollution.”

The Transportation Committee’s attention to the tire tax comes as it prepares for a widely anticipated tax package to fund what ODOT claims is a $1.8 billion annual shortfall. The tire tax would be in addition to any tax package designed to shore up ODOT’s finances; revenue from the tire tax would be unavailable for anything other than rail promotion and pollution abatement.

Most bills introduced in the Oregon legislature receive no committee hearing. A hearing is often a first step toward a later committee vote on the bill before it receives consideration by the full House and Senate.

Oregonians are already paying more for tires, due to the increasing price of rubber and labor and supply chain costs and disruptions. According to Consumer Reports surveys, consumers paid 33% more for tires in 2023, the most recent year available, than they did in 2020.

Oregon, which has the nation’s tenth-highest gas tax, does not currently tax tires. Some states, including Washington and California, already impose tire taxes.

UPDATE March 1: The Joint Transportation Committee is now officially scheduled to hold a hearing on the tire tax bill at 5pm March 4. You can submit testimony here.