PORTLAND, Oregon — The city of Portland sent out thousands of letters last week warning the recipients that they didn’t pay a pair of new taxes meant to fund homeless services and preschool. The problem: Many of those people say they actually did pay, and they’re having to spend hours on the phone to correct the issue.
“It’s pretty frustrating,” said Phillip Greenberg of Portland.
Greenberg and his wife were surprised after receiving two demand letters from the city titled “Notice of Debt.” The letters claimed the Portland couple owed the Supportive Housing Services tax and Preschool for All tax for 2023. Additionally, the city had added penalties and fees for non-payment. Greenberg said they had already paid the taxes through employer withholdings, and they had records to prove it.
When they called the city to get answers, Greenberg said they were put on hold for hours as number 185 in the phone line queue. Eventually, they got through to a customer service representative with the Bureau of Revenue and Financial Services.
“They didn’t know, didn’t have an answer and had to go to the managers,” said Greenberg. Eventually, the city acknowledged that Greenberg had paid the taxes in full but declined to provide any paperwork.
Numerous other people have contacted KGW with similar experiences, despite having paid the taxes. There are also postings on social media from confused taxpayers who received the letters.
Thomas Lannom, the interim chief financial officer for the Bureau of Revenue and Financial Services shared a statement with KGW Wednesday night.
"The debt notices being received by Multnomah County and Metro taxpayers are not an error; they accurately reflect penalties and interest owed for underpaid taxes. Underpayment penalties are assessed when taxpayers owe more than $1,000 as of April 15th. Employers don’t always withhold the full amount due and like with federal and state taxes, the taxpayer is ultimately responsible to ensure they meet this requirement. The taxpayers in question were all previously notified of this requirement," the statement said.
Metro spokesperson Nick Christensen explained that the city of Portland notified Metro late last week that it had mailed out thousands of "Notice of Demand" letters. Metro contracts with the city of Portland for tax collection. According to Christensen, the city mailed 7,463 letters for Metro’s Supportive Housing Services tax and 4,514 for Multnomah County’s Preschool for All tax.
Christensen said Metro is still trying to learn more, including how the city calculated the amounts owed in the letters.
The voter-approved personal income taxes only apply to individuals who made more than $125,000 annually or couples who bring in more than $200,000 dollars combined.
Metro collects a 1% tax on income over those thresholds for the homeless services tax. Multnomah County asses a tax of 1.5% over that threshold for preschool. The tax rate bumps up to 3% for all incomes above $400,000.
The confusing letters are just the latest misstep in rolling out the new tax programs.
Last year, Metro and Multnomah County waived all penalties and interest for the taxes after fierce public outcry. A KGW investigation found many taxpayers had no idea the taxes were overdue until they received a letter demanding payment along with penalty and interest.