Proctor v. City of Portland
263 P.3d 1099
Or. Ct. App.2011Background
- Plaintiffs Proctor and Ruien challenge City of Portland's 2008 amendments to PCC Chapter 7.02 as an impermissible income-based business tax under ORS 696.365 and ORS 701.015(6)(a).
- Before 2008, Portland's licensing scheme imposed a net-income-based fee labeled as a license, later renamed; it did not permit brokers like plaintiffs to be taxed under this scheme.
- 1987 HB 2218 defined business license tax, created a passport system (ORS 701.015), and included a carve-out (ORS 701.020) for Portland’s unique scheme; real estate brokers were exempt from such taxes under ORS 696.365.
- ORS 701.015(6)(a) defines business license tax as a fee to conduct business, excluding franchise or privilege taxes; ORS 696.365 prohibits such taxes on brokers working as agents.
- Portland amended its law in 2008 by changing terminology and removing the precondition to do business before licensing; plaintiffs allege the 2008 changes leave a prohibited tax in place.
- The trial court granted partial summary judgment for the city, finding no business license tax under the amended code; plaintiffs cross-moved for partial summary judgment.
- On appeal, the court holds that the 2008 revisions are immaterial to the 1987 legislature’s understanding of a business license tax and reverses to remand for damages analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the 2008 PCC revision a business license tax under ORS 696.365 and 701.015(6)(a)? | Proctor argues the 2008 changes maintain a net-income tax akin to a tax on business income. | Portland argues the 2008 changes remove the precondition and transform the scheme into a non-license tax, outside ORS 701.015(6)(a). | Yes; 2008 revisions are immaterial to the essential features of a business license tax. |
| Does ORS 701.020 carve Portland out from ORS 701.015 while still valuing Portland under ORS 696.365? | 696.365 applies; brokers remain exempt. | 701.020 excludes Portland from ORS 701.015 but not from 696.365. | Carve-out preserves exemption from ORS 701.015 but not from 696.365. |
| What is the correct interpretive framework for determining 'business license tax' in this context? | Textual history supports plaintiffs' view of a net-income-based tax. | Court should rely on statutory text and legislative history indicating the 1987 intent. | Court adopts the PGE/Gaines framework, holding 1987 intent controls and 2008 changes are immaterial. |
Key Cases Cited
- PGE v. Bureau of Labor and Industries, 317 Or. 606 (1993) (textual/contextual statutory interpretation framework)
- State v. Gaines, 346 Or. 160 (2009) (applies PGE framework to interpret statutes)
- State v. Ortiz, 202 Or. App. 695 (2005) (contextual background for statutory interpretation)