Featured Cases > Tonkon Torp Celebrates Legislative Victory for United Rentals
Tonkon Torp Celebrates Legislative Victory for United Rentals
Tonkon Torp’s Government Relations and Tax practice groups recently celebrated a legislative victory with the near-unanimous passing of House Bill 4139, which reforms the taxation of heavy equipment rentals in Oregon.
The rental equipment industry is a pioneer of the sharing economy and has been growing by leaps and bounds. Since the nature of heavy equipment rental is mobile deployment, the logic and practicality of imposing a “property” tax on the equipment had become problematic both locally and at a national scale. In 2015, Tonkon Torp’s Government Relations team was retained by industry leader United Rentals to work on property tax reform for this thriving Oregon industry.
Partners Drew Hagedorn and Rocky Dallum, both with experience in the transportation and commercial construction industries, refined the concept of the bill alongside United Rentals. They also worked to build a statewide coalition of industry stakeholders to educate lawmakers on how the bill would help Oregon rental companies stay competitive with like-businesses in neighboring states.
Tax attorneys Michael Mangan and Michael Millender were brought on board to draft the legislation, drawing upon their extensive knowledge of complex property tax policy. This type of collaboration between different practice groups is a signature strength of Tonkon Torp – part of the firm's effort to provide clients with “right-sized” solutions, including internal referrals to subject experts.
HB4139, called the Oregon Heavy Equipment Rental Tax, exempts heavy equipment rental providers from paying property tax on their rental fleets, and replaces that revenue with a tax based on the rental revenue. The bill was introduced in 2017 but did not advance that session – typical for new legislation. The team spent the intervening time continuing to build support from legislators and stakeholders, while the Tonkon Torp tax team provided feedback and coordinated responses during the rulemaking process following the bill’s passage. It’s notable that in today’s polarized political climate, Tonkon Torp was able to cultivate broad bipartisan support for the bill. In the 2018 session, HB4139 passed 57-1 in the House, and unanimously in the Senate. It will be implemented in January 2019.