The Board of Commissioners on Thursday, April 6, approved the first reading of an ordinance that will adjust penalties for late payments of Multnomah County’s Preschool For All income tax, among other changes to the tax code.
The changes, which must be formally approved in a second reading set for April 13, follow Chair Jessica Vega Pederson’s Feb. 14 amnesty announcement for taxpayers who still owed Preschool for All income taxes for tax year 2021.
Under the current code, taxpayers who don’t make a payment by tax day are assessed a 5% penalty. An additional 20% penalty is added if the tax isn’t paid over the next months. If the ordinance is approved, the 20% penalty will be removed from the code, leaving only the 5% penalty for not filing by tax day.
The ordinance would also modify the interest rate assessed on late payments, aligning the current 10% interest rate with the 6% interest rate assessed by the State of Oregon.
And it would officially codify the Chair’s decision to waive all interest and penalties for late or non-payments during tax year 2021. Taxpayers who were required to make quarterly payments in tax year 2022 also had their interest for quarterly underpayments waived for tax year 2022.
The County has taken several other steps to improve collection of the Preschool for All tax since the Chair’s Feb. 14 announcement. That includes issuing full refunds to individuals who previously paid penalties and interest; sending out a mailer to Multnomah County households notifying them of the payment deadline for tax year 2022; and improving outreach with employers and tax software companies.
Multnomah County voters approved Preschool for All in November 2020, expanding universal preschool to 3- and 4-year-olds. There were 714 slots available in the first year, with 1,400 expected in the second year. The program is expected to scale to universal access by 2030.