Oregon May Expand Its Petty Bicycle Tax to Children’s Bikes

Nice try, freeloader! Photo: Jonathan Maus/Bike Portland
Nice try, freeloader! Photo: Jonathan Maus/Bike Portland

Oregon taxes bikes. And not just a normal sales tax. We’re talking about a special excise tax that applies to bicycles and only bicycles.

Why? Not because the state needs the money.

Lawmakers predict the tax will bring in just $1.2 million a year, not enough to build something of statewide significance, even in the dirt-cheap world of bike infrastructure. The real reason Oregon taxes bikes is because some people resent the idea of making streets safe for cycling. The bike tax is the manifestation of their political will.

The tax was also seen as a way to sweeten the deal for a transportation spending package that bike and transit advocates generally approved of. To bolster the impression that the tax is somehow connected to transportation policy, a provision was included to exempt kids’ bikes. But the Oregon Department of Revenue (DOR) thinks that was a bad move.

Now state lawmakers are preparing to expand the tax to include kids’ bikes, reports Jonathan Maus at Bike Portland:

As currently written, “taxable bicycle” is defined as a bicycle with a wheel diameter of 26-inches or larger (so as not to tax children’s bikes) and a retail price of $200 or more. DOR’s proposal would drop the wheel-size stipulation from the definition and the tax would then apply to all bikes over $200.

DOR thinks the existing law is too complicated, and lawmakers think that children’s bikes mostly cost under $200 anyway. But the bike industry begs to differ, Maus reports:

In a letter dated February 21st, the Director of State and Local Policy for the PeopleForBikes Coalition Alex Logemann, National Bicycle Dealers Association Board Chair Brandee Lepak, and Bicycle Product Suppliers Association President Adam Micklin urged Committee members to maintain the 26-inch wheel diameter requirement.

“Our objection to altering the minimum wheel size requirement is premised on two issues,” they wrote, “1) the new bicycles that will be subject to taxation will primarily be children’s bikes; and 2) it will place an additional burden on bicycle shops that have already invested resources to comply with the tax.”

You’d think the bureaucrats and legislators in Oregon would have more important things to concentrate on than squeezing a few more dollars out of parents buying bicycles for their kids. It is, after all, supposed to be one of the more bike-friendly states. But once you start down the path of resentment-based transportation policy, who knows where it will lead.

  • Larry Littlefield

    If both the general sales tax and the special sales tax on bicycles is dedicated to bicycle infrastructure, then I don’t object. That’s the real issue.

    Just taxing all bikes would be less complicated, and taxes on the common practice of riding as children would help make the practice more common among adults.

    “Why? Not because the state needs the money.”

    These days, everybody needs money to pay for the irresponsible policies of the Generation Greed era. As everywhere else, the real fear is that bicycle revenues will not be used for bicycles after all.

    https://www.opb.org/news/article/oregon-pers-pension-system-cost-increases/

    “In the 1990s, Oregon let public pension benefits get out of hand, and now this decades-old mistake is returning to haunt the state’s taxpayers, schoolchildren and younger government workers. Like the slow spread of dry rot that leads to an expensive home repair, a scary bill is coming due.”

    “Oregon is $22 billion in debt on its pension obligations. Starting in July, public agencies are on track to pay nearly $900 million more in pension rates over the next two years. Two years later, rates are expected to rise by another billion or so. And then two years after that, by yet another billion.”

    It’s everywhere.

  • 1980Gardener

    This is one issue (ok, maybe not the only issue) where I disagree with Streetsblog. Bike taxes are a great idea and there should be more of them.

    1. we need to eliminate the idea that taxes are some sort of “bad” thing.

    2. We all want bikes to be a respected part of the transportation ecosystem. With that, comes responsibility and it hurts our credibility to argue for bike infrastructure and fees for drivers but then complain when we are asked to chip in.

    3. Our focus should be on how tax revenue is spent – not whether the tax exists.

  • Altered Beast ✓ᵛᵉʳᶦᶠᶦᵉᵈ

    hawaii also taxes bikes

  • undercover epicurean

    “taxable bicycle” is defined as a bicycle with a wheel diameter of 26-inches or larger and a retail price of $200 or more

    So I guess $1500 Bromptons are exempt? This is just poorly-crafted policy, top to bottom.

  • Evan D

    Cyclists are already chipping in, though. Someone who bikes and doesn’t drive more than pays for the infrastructure they use through income and property taxes. If gas tax and other revenue from drivers were the sole source of funding for roads, then yes, it would make sense to add a tax to cyclists. That’s far from the case, and discussions about funding transport almost never include actual numbers. Drivers just assume that they are funding roads and that others are free riding, without ever bothering to check that assumption.

  • Aaron

    One frequently sees this flawed line of reasoning.

    Cyclists don’t need bike infrastructure because bikes needs bike infrastructure (such as a railroads needs tracks or cars need gas/chargining stations). Cyclists need infrastructure as protection from vehicular violence. Shifting the financial burden to build that infrastructure onto cyclists is extortion.

  • Aaron

    General sales tax? Oregon?

  • Jared Kachelmeyer

    Still less tax than most people would pay on a bicycle since I believe Oregon doesn’t have sales tax.

  • 1980Gardener

    I disagree.

    We need paved, smooth bike lanes on which to ride. We need places to store our bikes. We need dedicated bike trails. Said another way, even if cars didn’t exist, we would need infrastructure. Forfeiting any obligation to care for or pay for the infrastrcture we need dilutes our voice and forfeits our right, in the eyes of many, to use it.

  • 1980Gardener

    Of course – at the end of the day, everyone helps to pay for everything. But why not pay a little extra to support something you use and value?

  • This is an argument for raising everyone’s income taxes to a level that would support not only bicycle infrastructure but also mass transit, public education, health care, and all other public goods. If that’s what you’re advocating, then I am in full agreement.

    Unfortunately, however, most Americans have become accustomed to their obscenely low-tax environment, and object to paying an appropriate level of tax.

  • 1980Gardener

    “This is an argument for raising everyone’s income taxes to a level that would support not only bicycle infrastructure but also mass transit, public education, health care, and all other public goods. If that’s what you’re advocating, then I am in full agreement.”

    – Generally, yes, I do believe that.

  • Larry Littlefield

    Ah, that’s right. Another reason why a tax on bikes is reasonable — if it doesn’t get sucked into the pile.

  • Larry Littlefield

    Except in NY, which has the highest state and local tax burden. Except for retired public employees, who are exempt from state and local income taxes in New York.

    We’re a bad example to places such as Oregon. The serfs don’t get things anyway, they just pay more.

  • Aaron

    I certainly never so much appreciated “dedicated bike trails” (aka bike lanes/paths free from cars) as I did when I began riding the daily commute with my kid, who most needs a safe, car-free protected place to ride to school and other errands. So, maybe the way to go is a 1000+% increase to the existing tax applied to kids’ bikes in proportion to their needs for extra infrastructure? (Sorry Brompton owners.)

    Otherwise, see Evan D’s reply. Nobody has forfeited any obligation to pay for infrastructure, except maybe a country mortified of gas taxes and facing the real costs of auto-centric transportation.

  • Evan D

    At what point is the “extra” enough? Nondriving cyclists already are paying “extra” in their other taxes, in terms of taking out less than they pay in. Now there’s have extra on top of extra. Shall we next have some more extra on top of the extra, which is on top of the extra? The main problem I have is that none of these user fees are proportionate to the costs of the infrastructure they are supposed to fund.

    Beyond that, this particular tax exempts big chain stores, who mostly sell bikes below $200, and hits independent businesses, who mostly sell bikes above $200. And a new bike less than $200 is going to cost its owner more over the course of 5 or 10 years than a bike costing slightly more. It’s a perverse incentive for poor folks to spend more money in the long run.

  • Evan D

    On-road bike lanes are only made necessary by cars. A neighborhood street is just as good for biking as a bike lane if the traffic is low enough. Off-street bike paths typically benefit pedestrians, skaters, etc. as well. In a world where true bike-only paths are built and cars don’t get free parking, a bike tax would be justified, but that is not our world.

  • Jesse

    I think we all agree that taxes aren’t a bad thing. And I’ll admit that I’m personally not all that offended by the tax but I can see the arguments against it. Moreover, I think the article was reasonable in its criticism.

    The article refers to the tax as “petty” and based on “resentment” rather than an actual real policy goal. Note that the article doesn’t call the tax “a grave injustice” or an “attack on cyclists” or anything of the sort. These are pretty mild criticisms and I think they’re supportable.

    1.) By the state’s own admission the tax doesn’t raise very much money so why are they even doing it? (that said, bike infrastructure is pretty cheap to build and maybe it’s possible that $1.2 million can be more than just a drop in the bucket)

    2.) The tax feels like an admission that cyclists somehow weren’t paying their fair share in the past which is doubtful for many reasons: most cyclists also pay gas tax and car registration fees that go towards infrastructure; User fees don’t cover all the costs of road infrastructure (e.g., local roads, where the vast majority of bikes lanes are, are highly subsidized by local property taxes); bike infrastructure is relatively inexpensive; cyclists impose far fewer costs on the public (e.g., wear and tear, congestion, pollution, noise, threats to public safety). In short, given the relatively minor costs that cyclists impose and the likelihood that virtually all cyclists are already paying to build and maintain road infrastructure (except for maybe poor people and children whom we tend to view as deserving of subsidies anyway), it is really hard to say that this tax is somehow evening the playing field.

    3.) But the real objection isn’t about the money. It’s the signal that it sends. It seems to concede to resentful drivers that somehow cyclists are only allowed to use infrastructure which they contribute to. So what does this mean on streets without any specific dedicated bike infrastructure? Might an enraged, impatient motorists feel more entitled to run a cyclist off the road there? In the aggregate, the tax probably isn’t going to change attitudes that much, but on the margins it could serve to reinforce the sense of entitlement that motorists tend to feel about the road, which is the exact opposite signalling purpose of the tax.

    And what if it’s decided that the tax isn’t actually enough? A motorist can always say “I pay gas tax and car registration and sometimes parking and all you pay is a measly little excise tax.” Now that we’ve set the precedent what’s to stop us from raising the tax or adding new ones? How about taxing bike repairs, bike helmets, spandex? How about toll booths on bike paths? It just seems like the start of a slippery slope.

    Ultimately, bike taxes offend cyclists because they are just another demand in a long litany that compel cyclists to engage in a form of respectability politics with motorists. It usually goes like this: If you do X then you can enjoy all the same rights to use the roads as we do. Where X is a whole list of things: wear proper gear (helmets, lights, bright clothes, etc…), assiduously obey all traffic laws (even though we feel free to break certain laws and the burden of obeying the laws is heavier on you), move over even if there isn’t room to pass, pay a specific user fee, ride fast when you’re a nuisance but slow when you’re a menace, don’t be rude even if you’re technically in the right, etc… etc… All these X’s add up to create more and more unnecessary barriers to cycling which,if you’re cynical like me, you recognize is exactly the point.

    The point is the respectability politics only serve to reinforce the dominant culture because they set the rules and they can make the list as long and as burdensome as they want. The goal of its proponents isn’t to create a set of rules that everyone can live by, but to set an arbitrary standard which they can amend at any time so the non-dominant group always fails to live up to.

    whew… that was a mouthful.

  • Aaron

    Indeed… it’s still a good deal for Californians to slip up over the border for bike purchases.

    The new bike excise tax was part of a broader set of bills that also appears to have introduced Oregon’s first new vehicle tax. If I understand correctly (not having purchased a new car in OR in 2017/8, there is now 1% tax on new car purchases (0.5% privilege tax on dealers and 0.5% use tax on buyers). That’s still proportionately far less that the flat $15 bicycle excise tax, particularly on cheap $200 bikes.

    My last bike purchase for myself was ~$1000, or at 1.5% at OR’s bike excise tax. My last bike purchase for my kid was at $250, or what would be 6% under the proposed new rules.

    So why not just have a statewide sales and use tax already? Ahhhh… Oregonians correctly recognize that as a slippery slope… but looks like they’re already sliding anyway. (My last car purchase was for $24k, a would be $240 tax in OR but a $2350 tax where it was purchased in CA.)

    Maybe the bike tax was a political expediency to get the broader vehicle tax through? It still seems primarily punitive.

  • 1980Gardener

    Thank you for your thoughtful comment. I think this all boils down to being “offended” by the ideas of the tax (to use your word, which I think it appropriate here). And that is perhaps where our views differ.

    I don’t see a reasonable or sustainable path forward with the idea that cyclists are rightful users of public infrastructure while at the same time refusing to pay any fees/taxes specific to that use. It may make people feel righteous, but it serves to only weaken the position of cyclists. Right to use comes with responsibility – embracing that responsibility, such as through the payment of mostly symbolic tax, would nullify arguments against paying our fair share or whether cyclists even belong on the roads. It turns the roads into something paid for by drivers, to something paid for by drivers and cyclists.

    The necessity for this is silly, given that nearly all cyclists are also drivers, but the manner in which we have addressed transport issues has and continues to place people in boxes, ignoring that reality (e.g. arguing that roads should be for people, while ignoring that drivers are people too). We either need to change the way we approach these issues (abandon the cyclist vs. driver mentality so prevalent in our discourse) or play the game and pay the tax for a legitimate seat at the table. The latter is the easier and more convincing approach.

  • kastigar

    “Bikes don’t pay for the roads.” You see it again and again. It
    appears on editorial pages, in blog comments, and shouted from car
    windows, often accompanied by the accusation: “Freeloader!” or something
    ruder.

    The bicycle freeloader myth is a strong and pervasive
    economic belief. It’s implied in rules that require cyclists to stay off
    certain roads, or ride in a manner that does not affect car traffic.
    And it’s enforced through media headlines, police standards, and the
    behavior and discourse of cycling advocates and detractors alike.

    But is it true?

    https://momentummag.com/free-rider-myth/

  • Flatlander

    I don’t think you followed the key point that bicyclists already pay into the roads, since local roads (that is, generally the ones bicyclists are allowed to use) are funded by state and local taxes that apply to everyone, NOT gas taxes. So rather than “nullifying” arguments that bicyclists don’t pay for their fair share, it wrongly validates them.

    And please don’t forget that wear and tear on the roads is proportional to the fourth power of weight. I.e. a 4000 lb car puts 160,000 times as much wear and tear on a road as a 200 lb bicyclist+bike.

  • 1980Gardener

    Let me clarify – the validation is what nullifies the argument. It allows us to move beyond it and offer up more desperately needed funding at the same time. Two birds.

    As for wear and tear, that is why, even with the bike tax, a person who desires to drive pays far more in costs than someone who does not choose to drive (e.g. car sales taxes, car property taxes, registration fees, license fees, gas taxes, and perhaps others).

  • Justine Valinotti
  • Jesse

    I agree with you that having a source of dedicated funding from cyclists could in theory lead to better cycling infrastructure and a greater sense of legitimacy to cyclists’ claim to the road. But that assumes that (1) the revenue from the tax is actually allocated to infrastructure or maintenance and not just thrown into a big pot (an assumption that does not always hold forever when it comes to fickle governments) and (2) that the objections that people have about cyclists not paying their “fair share” are based on logic and good faith.

    You say that “… embracing that responsibility, such as through the payment of mostly symbolic tax, would nullify arguments against paying our fair share or whether cyclists even belong on the roads.” I am skeptical that a token fee would make a difference. If the bike haters (i.e., those people who need persuading) were arguing logically and in good faith, then they would acknowledge that cyclists already do pay their fair share. There is little reason to think that a small tax would change that attitude and give cyclists a “seat at the table”. Instead, it would just add one more (admittedly minor) barrier to cycling.

    And one potential downside of introducing such a tax is that it can be increased — something that may already be happening if Oregon extends the tax to kids’ bikes. Increase the tax enough and it becomes a barrier to cycling. Given that we all agree that cyclists already do pay their fair share, it is reasonable to question the motives of the politicians advocating for the tax and of the constituents asking for it.

    An imperfect analogy is to Australia’s mandatory helmet law. It may have started out with good intentions and it may have been seen as a small concession for cyclists to make. But the fines have recently become exorbitant: $319 per offense (https://www.smh.com.au/national/nsw/cycling-fines-soar-in-first-year-of-harsher-penalties-in-nsw-20170801-gxn311.html). Without going so far as to conclude that the intent of this law is to punish and discourage cyclists, it is reasonable to conclude that at least the fine was established with very little regard to cyclists’ rights. Especially given that the hostility towards cyclists is at least as intense in Australia as it is in the U.S.

    Also I quibble with your characterization that we argue “…that roads should be for people, while ignoring that drivers are people too”. Notwithstanding the technical distinction between “streets” and “roads”, I think the argument here is that cities are for people and the tension isn’t between “people” and “drivers” but between people and cars. Given that cities have spatial limitations and that the presence of cars in cities has outsize negative effects on everyone, the interests of people in cities should outweigh the interests of people who want to drive their cars in cities. It isn’t to say that drivers don’t count as people or that cars have no place in transportation policy. It’s simply an acknowledgment that a driver is a person in a car and the impact of that car should be accounted for, especially in a dense city.

  • Michael

    There is no way a state can implement, administer, and audit a tax program for less than $1.2M per year. So this would ultimately have to be a revenue negative tax, that just grows government bureaucracy. Nice for accountants, but of no use to the general public and yet another inconvenience to business owners.

  • I read the column hoping that the indomitable Ms. Schmidt would propose something, but alas, it’s just another mindless rant. Too bad. We can either obsess over this kind of thing or we can just get on our bikes and take the effin’ lane. Go ahead and run me down, Motorheads. My husband is the best damn bicycle lawyer in America and he will take you out, financially speaking. I’ll be watching from above with a smile on my face and an umbrella drink in my hand. Oh, and yeah, try harder Angie…really. Enough with the pathetic whining.

  • Speak for yourself. I think taxes are a bad thing. Of course, I probably pay a lot more of them than you do.

  • Not all of us need protection, Aaron. Some of us have been mixing it up with cars and winning for a long, long time.

  • James

    Does the law define 26″ wheels? If by 26″ inch they mean 559, then that is only 22,” though the complete wheel with tire may be larger than 26″ but not always. A 26 x 1.75 tire on a 559 rim may be 25.5 inches in overall diameter, thus escaping the tax? Do I get a tax break for being a pedant?

  • Aaron

    Grace. Great for you and your vehicular cycling approach. I suppose you raise the same sort of issue 1980Gardiner does, but in a different way. Is “mixing it up” a useful approach in advocating cycling by being out there and being seen… scare the crap out of drivers by being in their faces and they will come to respect us? Or should we cower in the gutter while paying our bike excise taxes to gain respect and hope for a bike lane here and there? Personally, I’m more sympathetic to Angie’s approach.

    To respond to your post below (which seems to misread my comment anyway): certainly, I had long been riding before I ever saw a bike lane, around 1984 or so. Of course to this day I must often make use of “vehicular cycling” approaches since either complete infrastructure or the disappearance of cars is decades away. As a former state time trial champ who has also raced track and mtb, trained with some of the most notorious coaches and ridden tens of thousands of miles in SF and Oakland and other cities both American and beyond, I have no trouble with that or with your approach. But then, I also ride 40 miles a week with my 5yo back and forth from school. To counter that she and often a couple of her young friends should be pulling 25+mph in a four lane highway is insane. To suggest my 73yo mom should draft trucks while dodging distracted ride shares/cabs on her way to the library is insane. To suggest that the rest of us should share your death wish (or believe in any afterlife other than worm meat), when we’d rather just walk/pedal in peace, is insane.

    The way you talk about law makes me wonder if your husband is a lawyer at all; you seem a little ignorant of how these things more often play out (like you might get a new bike after a year of struggle and waiting… drivers hire good attorneys too and have a lot more law and sentiment on their side). Personal injury litigation is a very poor way to legislate safety… you’re going to be happy with your cash from your wheelchair eating through a tube or aside your kid’s grave? Are you going to wave a draft complaint in the air as an SUV barrels down on you? Yeah, that should work great. Frankly, that’s not the way bicycle litigation tends to work out. (If you’d like to educate yourself, you could start with Outside online piece following Denver based “bike lawyer” Megan Hottman. Bob Mionski’s blog is also excellent, who is the preeminent bike lawyer in the US and I’m guessing not your husband based on your tone and unseemly bravado.)

    The way you talk about a pressing health issue makes me question what sort of doctor you are? Certainly not one concerned with public health outcomes. I’m in cancer research, and yet, even though cancer’s the number 3 killer of 21yo and under crowd in the US, it ranks only 1/5th as deadly as motor vehicle crashes.

    Anyway, enough of the pathetic posturing Dr Grace. Schmidt did propose something: that Oregon skip a punitive, misdirected and ultimately useless tax on kids’ bikes.

  • Well, it’s plainly clear the tax is a punishment for cyclists from bitter ignorant motorists. But I mean, if you want to make it even clearer, you can point this out too 😛

  • Michael

    we pay sales taxes on our bikes. Then sales tax and/or meal taxes on our fuel. 🙂

  • Aaron

    Hey… so good for you Grace. I’m sure you’re awesome. I don’t mind mixing it up in traffic myself. Let’s hit it sometime and see what you’re made of.

    But did you see the picture at the top of this article? You have any “vehicular cycling” suggestions for that kid on the balance bike, doc? Or for my 5yo and her gaggle of young friends riding to school? Or my 73yo mom trying to get to the library?

  • Aaron

    Personal injury litigation is a very poor way to legislate safety. Though the image of one waving a draft complaint in the air to ward off impending traffic doom is quite comical… almost as comical as the trust put in the “foam clown hat.”

    You don’t seem to have a very good handle on how these these legal disputes often turn out for many cyclists/pedestrians. Apparently motorists also hire very good lawyers and tend to have a lot of law and sentiment on their side. I recommend you start by reading the Outside online piece featuring Denver based “bike lawyer” Megan Hottman. Also Bob Mionski’s blog is very good. Mionski is the preeminent American bicycle lawyer, and I’m guessing from your tone and bravado, not your husband.

    For those of us who believe the afterlife is just worm meat, a search for peaceful walking/cycling in the here-and-now is a better bet.

    Angie’s point was clear: Oregon should skip the punitive, misguided and ultimately useless excise tax on kids’ bikes.

  • 1980Gardener

    “I agree with you that having a source of dedicated funding from cyclists could in theory lead to better cycling infrastructure and a greater sense of legitimacy to cyclists’ claim to the road. ”

    – Glad we aren’t too far apart.

    “But that assumes that (1) the revenue from the tax is actually allocated to infrastructure or maintenance and not just thrown into a big pot (an assumption that does not always hold forever when it comes to fickle governments) and (2) that the objections that people have about cyclists not paying their “fair share” are based on logic and good faith.”

    – As for (1), that speaks to the value of particular taxes only – not necessarily with respect to the idea of whether bike taxes are a good or a bad thing (the purpose of my comment). As for (2), I would assume such objections are for the most part.

    “I am skeptical that a token fee would make a difference. If the bike haters (i.e., those people who need persuading) were arguing logically and in good faith, then they would acknowledge that cyclists already do pay their fair share. There is little reason to think that a small tax would change that attitude and give cyclists a “seat at the table”. Instead, it would just add one more (admittedly minor) barrier to cycling.”

    – I cannot comment on this because I’m not sure who these “bike haters” are that you are dealing with.

    “And one potential downside of introducing such a tax is that it can be increased — something that may already be happening if Oregon extends the tax to kids’ bikes. Increase the tax enough and it becomes a barrier to cycling. Given that we all agree that cyclists already do pay their fair share, it is reasonable to question the motives of the politicians advocating for the tax and of the constituents asking for it.”

    – Yes, and higher transport taxes are something I generally support.

    “Also I quibble with your characterization that we argue “…that roads should be for people, while ignoring that drivers are people too”. Notwithstanding the technical distinction between “streets” and “roads”, I think the argument here is that cities are for people and the tension isn’t between “people” and “drivers” but between people and cars.”

    – yes, language is a long-standing concern of mine. I feel that too often, transport debates devolve into tribal disputes and that language is used to divide us. But that is another topic.

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