Oregon Bike Tax Proves Nothing is Safe from Taxation

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Posted by Shane Otten on Monday, August 14th, 2017, 4:36 PM PERMALINK

The Oregon Legislature is about to make unfortunate history as the first state to enact a bike tax. This comes as a surprise since Oregon, especially Portland, is known for its avid cycling culture. The state is even home to the head of the Congressional Bike Caucus, Rep. Earl Blumenauer (OR-3). Despite these factors, government proves yet again that it will tax anything that moves.

This unprecedented tax is part of a $5.3 billion transportation package that Democratic Gov. Kate Brown is expected to sign into law later this month. Once enacted, all bike purchases over $200 with a wheel diameter of at least 26 inches will be subject to a $15 tax. It is expected to cost the taxpaying cyclists of Oregon $1.2 million per year.

While the government states the funds will be used to improve non-motorized transportation, some Oregonians remain skeptical, like Bill Cole, owner of Wheelworks Bicycle Shop in Eugene, OR.

“The idea of having money going directly to support bicycling I think is a good idea. But once a tax gets started, it never stops. And it only increases,” Cole said.

Not only are consumers adversely affected by this tax, but local bike shops will especially feel its consequences. In specialty bike stores where more mid- to high-end bikes are sold, the average price of a bicycle is $714. As a result, the vast majority of purchases will be subject to the tax. However, big box retailers that sell cheaper bikes, at an average of $82, will typically avoid the tax and its negative effects. By indirectly targeting “mom and pop” bike stores, Oregon’s new tax will harm these small businesses.

Opposition to this tax has brought together groups—conservatives and environmentalists—that generally find little to agree upon. By taxing biking, a healthy and environmentally friendly method of transportation and leisure, the Oregon legislature sends the message that it cares more about revenue than both taxpayer well-being and environmental concerns.

By singling out a single product and activity to punitive taxation, the Oregon bike tax represents the exact opposite of sound policy. As a lone positive takeaway from this misguided tax, this situation presents an opportunity to educate progressive bike tax opponents who typically endorse higher taxes in other areas. If a tax on new bikes leads to fewer people biking or purchasing bikes, as cycling advocates have stated, then the same can be said for higher taxes on income and investment. 

Photo Credit: Robert Ashworth

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