Caving to Resentment Politics, Oregon Enacts a Bike Tax

The preposterous bike tax accomplishes no discernible transportation goal except dampening demand for new bicycles.

If you buy a bike for more than $200 in Oregon now, you'll pay a $15 tax. Photo:  Tedder via Wikimedia Commons
If you buy a bike for more than $200 in Oregon now, you'll pay a $15 tax. Photo: Tedder via Wikimedia Commons

A straw man erected by bike infrastructure opponents has morphed into official policy in what’s supposedly one of the most bike-friendly corners of the United States.

The accusation that people who ride bikes don’t pay for roads is familiar to anyone who’s tried to argue for bike infrastructure in a public setting. Never mind that biking puts almost zero strain on the road network compared to driving, that people who bike also pay a variety of taxes that do fund roads, and that drivers don’t cover the full cost of car infrastructure by a longshot. It’s all about resentment.

Nevertheless, that idea has managed to shape the law in Oregon (yes, Oregon), which now has a tax on bicycles. Jonathan Maus at Bike Portland explains how it works:

The tax was opposed by small business owners, advocacy groups, and by many voters; but the political winds were simply too much to overcome. I have some thoughts about how we got to this point that I’ll share in a future post. For now, here are the final details of the bike tax:

  • It’s a $15 flat tax instead of the 4-5% tax initially proposed.
  • Applies to new bicycles with a wheel diameter of 26-inches or larger and a retail price of $200 or more.
  • Expected to raise $1.2 million per year and cost $100,000 per year to administer.
  • Funds will go into the Connect Oregon program and be set aside specifically, “for the purposes of grants for bicycle and pedestrian transportation projects… that expand and improve commuter routes for nonmotorized vehicles and pedestrians, including bicycle trails, footpaths and multiuse trails.”
  • Tax will be collected by bicycle retailers and they’ll be required to file quarterly returns with the Department of Revenue.
  • Bicycle retailers are required to keep receipts and records pertaining the collection of the tax for a minimum of five years.
  • The tax will go into effect 91 days after the legislative session ends (that’d be October 8th if it ends on July 10th as scheduled).

So there you have it. We are taxing the healthiest, most inexpensive, most environmentally friendly, most efficient, and most economically sustainable form of transportation ever devised by the human species.

Congrats to Oregon on its preposterous bike tax that accomplishes no discernible transportation goal except dampening demand for new bikes. Will this finally put to rest the politics of bicycle resentment (spoiler: no), or will it just embolden the usual cast of bike lane haters to ratchet up their noise?

More recommended reading today: KXAN reports that some Houston residents are complaining “speed cushions” will slow emergency fire evacuations — but in practice what’s really endangering residents trying to flee wildfires is sprawling neighborhood design. And Human Transit says that while uncrowded transit vehicles may have plenty of room to stretch your legs, that’s not what cities should be striving for.

  • Tyra Lynne Wahl

    Don’t kid yourself, Portland is not as “bike friendly” as some would like to believe it is. There is just as much aggression towards cyclists there as anywhere else and in some parts of the metro area it’s even worse.

    You would think with as “crunchy” as Portland and Oregon as a whole likes to believe itself to be that they would be rewarding people who commute via bike on the daily… but no, instead they enact a regressive backdoor sales tax in a state that prides itself on not having a sales tax.

    But that is par for the course in a state that penalizes the hell out of everyone with a lucrative full time job who also owns a home with some of the highest income and property taxes in the nation on a state whose population is under 5 million.

    And people wonder why I left my home state? Because they’re nuts up there.

  • Tyra Lynne Wahl

    Hmmmmm… I am pretty sure that even if I choose not to drive my car on the regular I still have to pay licensing and insurance. So how again are we not paying into the pot?

  • Tyra Lynne Wahl

    That is only if the money ends up going to what it is meant for.

    Portland metro has an amazing habit of sucking money out of the general fund for projects that are deemed more acute to the function of the city… #1 on this list the last few years is dealing with their rapidly growing homeless issues they have. They want to build “free” housing for the homeless on the public’s dime while not building affordable housing (not section 8) for those who actually work.

    And will the rest of the state benefit in anyway from this tax since we’re all essentially paying into the kitty? Because I highly doubt that The Dalles is going to get bike paths, protected lanes or increased bike infrastructure even though we have an ever growing bike culture.

    This will end up being 100% about the Portland metro area and the rest of the state will have to suck hind tit for any leftovers.

  • Tyra Lynne Wahl

    and neither do pedestrians who also use bike paths…. so your point is?

  • Tyra Lynne Wahl

    Exactly, and if everything I have read recently about the Portland metro area and Vancouver area is true housing is at such a premium that working people cannot afford a place to live, let alone close to where they work or public transpo. So every penny for some counts.

  • Tyra Lynne Wahl

    Wow Joe, that is some sober well thought out thinking…. and I agree with you, just how do you come up with a flat $15 fee per bike as “fair” to anyone?

  • walks bikes drives

    I think your math is a little off on your 3% bike tax idea. A $250 bike at 3% would be a $7.50 tax. On a $4000 bike, 3% would be $120. I would consider that pretty fair in Oregon with no sales tax. In NY, if they were going to do the same, 1% should be the max, given that we are already paying almost 9% in sales tax.

  • walks bikes drives

    Insurance payments don’t go to the roads, they go to the private company who provides your coverage. Licensing, both for the driver and for the car (registration) is a low fee that covers the administrative costs of licensing you and the car, ie maintaining the database, printing the license, stamping the plates. None of the above have anything to do with road maintenance.

  • Joe R.

    I did say 3% of the price in excess of $200. In other words, a $200 bike wouldn’t be taxed. $50 of a $250 bike would be taxed at 3%, and so forth.

    In NYS, and especially NYC, all taxes are already so high I don’t think there’s much leeway for raising them, at least those taxes which might hit anyone who is poor through upper middle class. I might still support a special 1% bike tax if it went entirely for something like bike highways, which is something I think NYC sorely needs.

  • walks bikes drives

    Ah. I read that as 3% on any bike over $200 rather than not taxing the first $200 and 3% after that.

  • Alex

    I don’t know about Oregon, but here in California a portion of sales tax revenue goes directly to transportation. The county I live in even had a special sales tax to fund the construction of a freeway. So cyclists (who at least have to buy tires and chains) have in fact helped pay for roads, including a freeway they aren’t allowed to ride on.

    What makes an activity commercial as opposed to recreational? Is riding a bicycle to work a recreational activity? Is driving a car to the beach a commercial activity? It seems like an absurd distinction to me.

  • Joe R.

    Yes, the idea is conceptually similar to the way we exempt the first x dollars in income from income taxes on the theory the poor really can’t afford to pay anything. Same here. The very poor buying low-priced bikes won’t pay anything. Those who move a step up will pay a little something just so they have some skin in the game, but nothing onerous. Even those buying expensive bikes would pay a lot less than in NYC but they would be supplying the bulk of tax revenues.

    It probably even makes sense from a usage standpoint. Those who are just trying cycling won’t invest a lot of money, and may not use the infrastructure much if they lose interest. Those who keep going will eventually want better bikes but then they’ll pay more in taxes to support their much greater use of the bike infrastructure.

  • Well, the $150 million for Portland is mostly set by the existing gas tax formula that gives 60% to the state, 24% to counties and 16% to cities, and then divvied among cities by population and counties by auto registration. So The Dalles and Wasco County will each get new money that way, in pretty much the same proportion. It’s true that The Dalles might misspend its allocation. My impression is that the politics of that have improved somewhat in the last few years?

    As for misappropriation: aside from the new transit money (which goes to transit agencies) this isn’t general fund money, it’s gas tax money, so by state law it has to go to roads. (Including biking & walking infra along and across the roads.) Can’t go to homelessness or anything else. (Including transit tunnels or trails, unfortunately.) Since Portland currently spends essentially no general fund money on transportation, they can’t just stir the money around, either.

    As for geographic distribution, I’m not sure how the transit tax money gets split up but I know the main purpose of that new $100 million a year for bus service is that it’d be a huge boon to rural transit agencies who don’t have district payroll taxes like the Eugene and Portland areas.

  • As pointed out by @MikeOnFoot:disqus, the bill as passed unlocks at least $300mn for infrastructure that will directly benefit bicyclists over the next ten years. Meanwhile, the tax is projected to collect $11mn (after administration) over the same time period. That’s not anywhere near 1/3 the cost of the improvements.

  • Simone15

    It should be a license plate with annual registration & proof of insurance.

  • If not for cars, so-called sprawl largely wouldn’t exist.

    There was still sprawl before the car. Perhaps you’ve heard of “streetcar suburbs“? At their core, they were the same opportunity as sprawl of today: the ability to live away from the city while still being able to get back to it quickly when necessary. And the same is continued today, though mostly not in America. The Dutch cities of Almere and are suburbs of Amsterdam and Utrecht that have been built in the middle of fields, but they aren’t car-oriented even though freeways do connect to them (and are being widened [Dutch]). But there is frequent transit service to and from the bigger cities and one can easily get around within the suburbs by biking, transit, or walking, which is in stark contrast to most American suburbs. Also, they have a lot more mixed-use development as well as mixed housing types.

  • Wait, I thought we Californians were the “nuts”…?

  • No, 700C is more than 28 inches, so taxes will be paid. But I do predict a surge in sales across the Columbia River in Washington…

  • $15 is a lot, but to be fair, there are a lot of bicycle opportunities available at a price point that doesn’t trigger the $15 tax and I’m sure the market will adjust too.

  • On-street parking isn’t the real problem, it’s how the street parking is designed. In many American communities, the parking lane is visually and physically contiguous with the rest of the roadway (i.e. paved all the way to the curb). Changing that and building parking that uses a different material (such as pictured) could go far toward reducing the maintenance costs and also has the side benefit of visually narrowing the roadway even when no cars are parked. https://uploads.disquscdn.com/images/d162ccb9454f7c128239a0f9687b3ecfce3a37b268107c1f9b2a68b7efa7de29.jpg

  • David Nelson

    Thanks for shedding some light here.

  • David Nelson

    Your assuming that the only money spent on alternative transportation should come from one funding source. Reducing congestion and exhaust benefits everyone. Getting exercise reduces illness, something which helps to keep health care costs down. Having a safe route between home, school and other destinations is good for kids. Try to think like a citizen.

  • David Nelson

    Too many assumptions. Before I thought about the impact of doing so, I used to drive for recreation. I still do some, although much less. I agree. The “Drivers spend less money on shopping than cyclists” was indeed a sloppy comment. It is more accurate to say that someone on a bike is more likely to pull over at a moment’s notice to go in a local store than someone who is driving. That is also dependent on the convenience of parking etc. So, it’s situational because we know that drivers also buy things. One thing that is not measured as often or as well as it should be is the actual amount of subsidy for roads. Sure, they’re useful, but so is bicycling infrastructure. Each has benefits and costs. Why not be objective as long as you are worried about others not being objective?

  • David Nelson

    Yep. We have to examine our assumptions to know what we are talking about.

  • Joe R.

    The streetcar suburbs weren’t as “sprawly” as car-oriented suburbs. This meant infrastructure cost less per capita. And transportation cost much less per capita without the need for roads built to a high standard to serve low-density housing tracts.

    In the Netherlands it seems people in suburbs mostly get around locally by bike. They use their cars for longer trips. The higher average density and mixed use development enables this.

    When you have houses on 3/4 acre lots but still expect urban-type amenities the cost of infrastructure is unsustainable in the long run. Even though some people like to say autonomous cars will be the savoir of the suburbs, roads aren’t the only infrastructure. My guess is closer-in American suburbs will densify until they resemble Dutch suburbs. Exurbs will probably wither and die.

  • walks bikes drives

    What is the point of a license plate? To fit on a bike, it would be too small for anyone to see it. You don’t have the space on a bike for a plate like you do on a car.

  • Vooch

    wrong

    most bike infrastructure is locally sourced which is usually paid through property taxes.

    cyclists therefore pay for bike infrastructure AND subsidize mass motoring

  • Vooch

    every study every undertaken shows that cyclists spend far more in local shops than drivers.

    cycling is a everyday mobility option that doesn’t kill 40,000 innocents annually

  • Simone15

    You can make them smaller – And put a tag on it. A one time “tax” at purchase is BS. This should be an annual fee. Just like a car

  • walks bikes drives

    That’s the point. A car license plate can barely be read from a distance. The size a bicycle plate would have to be would be way too small to actually read it unless you are a few feet away from it.

    Licensing a car pays for the costs of the DMV and nothing more. Good luck getting anyone in office to agree to a $75+ annual fee for a bicycle. Why dont you try arguing for something better thought out where you might get results.

  • DangerousDan

    Note that the law says”wheel” and a 700c wheel has a bead diameter of 622 mm which is about 24.5 inches. Add the lip and the wheel is a little under 25 inches. The tire is over 26 inches in outside diameter. The wheel is not.

  • walks bikes drives

    Note that, by definition, a wheel is the hubs, spokes, rim and tire. A wheel set is the above without the tire. Rims on a car are single piece without spokes and hubs, so the wheel on a car is just the rim and the tire put together. So if the law says 26″ wheels, that will include the tire.

  • walks bikes drives

    FYI – one of the main reasons this type of thing crashes in the first place is administration costs greatly outweigh the intake of funds. That’s why DMV registrations are so high. But asking $100/yr for registration of a vehicle that has an average purchase price of $30,000 is a lot different than asking $100/yr for registration of a vehicle that has an average purchase price of about $350.

  • DangerousDan

    That will be up to the courts to decide, no doubt. But when I buy a wheel I do not expect a tire to be included. I do expect a hub, spokes, and rim, and that is the common usage of the term wheel as applied to a bicycle.

    I believe that Oregon law provides that words which are not defined follow the common usage. You can claim that the wheel includes the tire until you are blue in the face, but go to ANY bicycle shop or web site and ask for a wheel for your bicycle and they will not include the tire.

    Note also that I have a garage full of fairly high end bicycles. Not a single one of them was purchased with either version of wheels attached. I buy frames, wheels, tires, saddle, etc.

    This is just another way of trying to suck more money into the sphere of control of the state government. And they are desperate there. Their public employees pension fund is out of control and it is sucking the whole state government down the drain.

    I used to live in Oregon, and the political structure there is totally corrupt. The former governor was an outright crook. Look back at the number of low life scum that have dominated politics in Oregon. It is sad.

  • walks bikes drives

    I totally hear what you are saying. And people misuse words and names all the time. Yes, if you walk into a bike shop and ask the guy for a wheel, he will sell you a bare wheel set without a tire. But that’s because he knows what you are asking him for. Try asking him what it is called. Besides, the common usage in court will come from the dictionary.

  • Just because they can doesn’t mean that it’s a good idea. What’s the goal? Administration is going to cost more than it raises.

  • Evan D

    In Oregon, roads are only 2/3 paid for by drivers. The rest comes from the general fund, which cyclists pay into regardless of whether they drive. Considering that a 2,000lb car does several thousand times more damage than a 200lb cyclist, over double the lane width, cyclists are the ones subsidizing drivers.

    https://taxfoundation.org/how-your-state-s-road-spending-funded-2016/

  • Evan D

    The higher-cost-of-goods scenario is better. Right now we’re subsidizing producers in Nebraska at the expense of those who are more local. No way that’s fair.

  • Jacob Wilson

    The fact that motorists think a measly gas tax is payment enough for not only destroying the environment but also any resemblance of public space in most of the US to accommodate their parking needs is just outrageous.

    Motorists pay way too little for the damage they do. Not to mention the cost of human lives of both motorists and non-motorists alike.

  • Vooch

    dude

    how much does a highway interchange cost ?

  • Joe R.

    The goal seems to be to make owning a bike as expensive as owning a car because car owners seem to be resentful that their mode of choice costs so much. Of course, nothing is stopping these car owners from switching to bikes and saving money, too.

  • Depends on the interchange, but usually around $50mn for a basic cloverleaf.

  • Joe R.

    Exactly. When car owners start paying something like $8K or $10K a year for registration then we can start talking about license plates for bikes. Until then this idea should remain on history’s dustbin of bad ideas.

  • Vooch

    try $1 billion dude

  • DangerousDan

    I believe we agree on this: this law will probably wind up in court. I checked the Walmart web site and they have 6 bikes with 700C or “29er” wheels which sell for over $200. Target has 10 or so. REI? Any other big players in the $200-$400 bike range? Bimart? Costco?

    The law will probably be challenged, although the big players may decide it is not worth the hassle and just stop selling bikes in the $200-$400 range. Then the little shops will be stuck footing the bill and loosing sales to internet and out of state vendors.

    Meanwhile, the bikes I buy in the $2k to $10K range will go untaxed by this poorly written law because I buy piles of parts and make my own bike?!?

    As I recall, when I lived in Oregon I paid a big pile of money in income taxes and property taxes. A lot of road maintenance comes out of those funds.

    And truth be told, bike paths are not created for the benefit of bicycle riders. On my commute I ride about half the way in the street and go close to or over the speed limit. People pass me all the time when I am going 5 over… Stupid bike! Get out of my way!

  • betty barcode

    Sloppy comment aside, if bikes, transit, and/or walkable design enable a household to downsize from 2 cars to 1 or from 1 to zero, that household now has more discretionary income to spend on goods & services.

  • walks bikes drives

    Yeah, I get that all the time as well and I’m almost always speed limit +/-5.

    If the Kmarts and Walmarts stop carrying the $200+ range bikes, that would be a benefitnto the small shops. Plus, I don’t know how it goes out there, but here in NYC, when you buy a bike from a bike shop, you typically get free tuneups for life. This is why a lot of people still buy bikes in the city when you can get it in the suburbs for 4.5% tax rather than 8.875% tax. I don’t think it will hurt the little guy in the least.

  • Where are you finding cloverleafs that cost $1bn to build?

  • Camera_Shy

    I am not sure, but I would guess the new $15 tax is in addition to any sales tax collected…

  • Vooch

    Dude,

    everywhere it’s the typical
    cost

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