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Oregon ballot measure would ban future taxes on groceries

October 31, 2018
In this photo taken Wednesday, Oct. 31, 2018, in Lake Oswego, Ore., a shopper leaves a Safeway store. Grocery giant Albertsons/Safeway is one of several out-of-state grocery industry interests, including Costco, Kroger and the American Beverage Association, donating generously to a campaign for an Oregon ballot measure that would enshrine a ban on future grocery taxes in the state constitution. Opponents say the measure is an attempt to preempt a soda tax in the state. (AP Photo/Gillian Flaccus)

PORTLAND, Ore. (AP) — Oregon is one of just a handful of states without a sales tax, and voters have repeatedly rejected attempts to add one.

This election, a ballot measure asks voters to enshrine that opposition in the state constitution — at least, when it comes to groceries. Measure 103 would ban lawmakers from imposing any future taxes or fees on the sale or distribution of groceries and non-alcoholic beverages. It would allow taxes on alcohol, cigarettes and marijuana, which is legal in Oregon.

To outsiders, the measure may seem boring, but out-of-state interests have taken note.

Supporters have poured more than $5 million into the campaign to support the measure, led by grocery giants Kroger, Costco, Albertsons/Safeway and the American Beverage Association. And former New York City Mayor Michael Bloomberg dropped $1.5 million into the opposition campaign last week, bringing opponents’ spending to $2.7 million.

That’s because while many Oregonians see the measure as another referendum on a sales tax, it’s being framed by opponents as a pre-emptive strike against a soda tax, a revenue-raising tactic that’s gained steam elsewhere.

“This is not about groceries. We don’t have a sales tax in Oregon and we don’t have a sales tax on groceries. Nobody is proposing that and nobody thinks that’s a good idea,” said Katherine Driessen, a spokeswoman for Our Oregon, which opposes Measure 103. “We know that dynamic here. It’s not the first time we’ve seen out of state corporation spend millions on a campaign like this.”

Proponents of the measure say it’s not about soda, but about making sure that Oregon food sales remain untaxed.

It’s also a response to another hot-button measure in 2016 that would have taxed the gross receipts of the state’s largest companies to raise revenue in lieu of a sales tax. That initiative failed, but only after some of the same players that favor Measure 103 poured money into its defeat.

Dan Floyd, the spokesman for Yes on 103, says the gross receipts tax measure was the latest and biggest attempt to pass laws that would tax groceries either up front or through increased costs passed on to shoppers.

“In our industry, we’re operating on a 1 to 4 percent profit margin, which is razor thin,” Floyd said.

“We know revenue is important and we’re not going to get into the revenue debate — but we’re going to make that debate easier by taking food and beverages off the list of things that could be taxed.”

That’s an idea that appeals to voter Audra Maxwell, a native Oregonian who works at McDonald’s.

Maxwell, who’s a registered Republican, said this measure seems like it could end the perennial debate over a sales tax.

“Obviously, Oregonians don’t want a sales tax. I’m almost 42 and almost every race has had something about a sales tax and we’ve always voted that down,” she said while waiting for the bus on a recent rainy day.

“So, I’m thinking it’s a good start.”

If Measure 103 does pass, both sides disagree about its ultimate impact.

Opponents believe it would ban on any taxes associated with the production, distribution and consumption of human food, from restaurant meals to farms to the gas mileage for trucks that transport food to stores.

The broadly worded ballot language would create a “bureaucratic nightmare” if the measure passes, said Driessen.

“All of a sudden, anyone who has anything to do with their definition of groceries is going to have a really good argument for why they shouldn’t have to pay that part of the tax,” she said. “The breadth of it is really troubling.”

Those in favor of the measure say that’s not true, that it only applies to “the 50,000-plus items that are in our grocery store.”

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Follow Gillian Flaccus on Twitter at http://www.twitter.com/gflaccus

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