Portland's 1% Tax on Billion-Dollar Firms Has Raised $1.7 Billion

Portland, Oregon has collected more than $1.7 billion from a 1% tax on the local retail sales of billion-dollar corporations, and the money is now funding hundreds of climate projects across the city. The tax, enacted by ballot measure in November 2018, was the first of its kind in the United States. It applies to roughly 500 large companies — Amazon and Walmart among them — with more than $1 billion in annual retail sales and at least $500,000 in sales inside Portland, with exemptions for necessities such as groceries.

On a former landfill in the city, workers are installing hundreds of solar panels in a community solar project that lets around 170 low-income families subscribe to a share of the electricity. Because the city fund covers installation costs, participants pay as much as 40% less than their previous utility bills.

What does the fund pay for?

The Portland Clean Energy Community Benefits Fund administers the revenue. Its latest grant round includes:

• Expanding a "bike bus" program that helps kids bike to school safely, aiming to replace more than half a million miles of car trips;
• A bike-lending program for employees at a local university;
• Grants supporting EV access;
• Backyard habitat restoration through the Bird Alliance of Oregon, targeting 420 new households in areas hit hardest by urban heat islands, air pollution and low tree canopy;
• Home retrofits, energy-audit worker training, and air conditioners for residents after the deadly 2021 heat wave;
• Net-zero housing, ensuring builders keep heat pumps and insulation in plans as construction costs climb.

"Without those funds, it wouldn't exist," says Jessica Carmona, renewables program director at the Bonneville Environmental Foundation, which is building the solar farm. "It's not possible to build these types of sites for nonprofits that are low-income benefiting, with such high levels of savings, if you're not getting funding."

Sam Baraso, the fund's program manager, says the money protects green features in housing projects. "We're far too often in this environment where costs are going up tremendously and everyone is trying to figure out how do we get our housing built — which is so critical for our community — and they're whittling away everything that they originally put into the plan," he says.

How did the politics play out?

Corporate opposition, backed by Amazon, outspent the supporters' campaign — but the measure passed with 65% of the vote. A 2024 survey found 65% of residents still viewed the fund favorably. The Portland Metro Chamber, which had opposed the measure, defended it last year when questions arose over spending.

Two supermarket chains added 1% charges to some non-food items after the tax took effect; customers sued and won a settlement. WinCo agreed to pay $3.6 million to settle the class action. It is unclear whether other companies passed the cost on, but economist Eric Fruits of Portland State University, an opponent, believes they did. "Just naturally, it gets passed on," he says. "Even if it's not a line item, it's going to get passed on in higher prices." He argues inflation hid the effects and that the tax ultimately caused no real harm to consumers or retailers.

Why is the money bigger than expected?

The city projected up to $60 million a year. The tax now brings in around $200 million annually, according to the city economist, because the pandemic shifted shopping online — raising retailers' Portland sales — and inflation lifted the dollar value of purchases. The surplus forced a redesign: the program expanded from community grants to larger city projects, including a rapid bus corridor, tree planting and park systems.

"When that stuff bottomed out at the federal and state level, we became the only game in town," says Raffaele Timarchi, the fund's external affairs manager, describing the moment federal climate dollars disappeared under the Trump administration. Several projects would not have moved forward without the fund, he says.

What comes next?

The state has banned other communities from adopting similar surcharges, though Portland kept an exemption. Eugene, Oregon passed a related program this year, and Portland's team advises other cities to set clear goals for how funding decisions get made. A failed ballot initiative this year tried to divert fund money to hiring police officers.

City audits in 2022 and 2023 flagged weak oversight and unclear goals, then noted progress. The city estimates the first three grant rounds cut roughly 25,500 metric tons of CO2 — a sliver of the world's 38 billion annual tons. "$1.6 billion that we moved over five years is just an illusion of abundance," Timarchi says. "It's just not enough money for all those projects, so this question of prioritization is really important."