OSPS E-News ~ Multnomah County Income Tax

Fri Sep 19 16:37:40 PDT 2003

Message to Agency Payroll Offices

Multnomah County Income Tax Withholding ~ OSPA

September 19, 2003

This is a follow-up to previous communications about the Multnomah County
income tax.  Previously we told you we were evaluating the costs associated
with creating system structures in OSPA to withhold Multnomah County tax
from those state employees who reside in that county and are subject to the
tax.  

We have determined that it would cost around $50,000 to modify OSPA to
implement this change.  That would include structures to calculate and
withhold the tax, summarize, report and pay over the tax via ACH, create
reports and year end functions for W-2s and year-end reporting.   

In researching, we learned that employer withholding wasn't mandatory.  We
also learned that we couldn't simply institute withholding for any employee
who had a home address in Multnomah County.  Employees have to request
withholding by filling out a request form.  The request form has to be
re-filed on an annual basis.  That would be an agency payroll office
workload.   You may view the enrollment form here:
http://www.co.multnomah.or.us/tax/index.shtml
<http://www.co.multnomah.or.us/tax/index.shtml> 

The Multnomah County tax is a temporary three year tax.  By the time
information for employers was available, most of the first year had passed.
Also, at this point, we don't know what effect HB 2152 will have on the
Multnomah County tax.  In his press statement upon signing HB 2152, Governor
Kulongoski speaks of assurances from Multnomah County that the local tax
burden will be reduced.    It seems less than sensible then, for us to spend
programming budget dollars to implement a tax withholding program with for a
limited duration that will likely require interim changes.  

State employees who reside in Multnomah County do have a
smoothly-functioning way to set aside funds to pay their annual tax burden.
We recommend that they use one of their ACH deduction slots to set aside a
monthly amount of money and deposit it to a savings account that can be used
to escrow those funds for the payment of the annual tax bill.  We see this
as a virtually no cost solution using functionality that already exists in
the state's payroll system.   With that alternative available, we will not
move forward to modify OSPA to create a Multnomah County tax withholding
structure at this time.  

Sharon McKeehan

Manager, Oregon State Payroll Services

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