Safeway_Oregonian.JPG

Safeway says it's subject to the initiative after all.

(Oregonian file photo)

Updated at 11:56 a.m.*

Safeway said Tuesday that it is, in fact, subject to taxation under Measure 97 - a reversal of what the company said in a statement last week delivered through the measure's opponents.

"We had a misunderstanding," Jill McGinnis, Oregon spokeswoman for Safeway and Albertsons. She said Albertsons stores, which share a common owner with Safeway, are not subject to the tax.

The Oregonian/OregonLive reported online Tuesday that Safeway and Albertsons were exempt from the tax, a consequence of the unusual way Measure 97 is organized. The initiative proposes a 2.5 percent tax on sales within Oregon over $25 million, but exempts certain types of businesses from the tax.

The confusion over Safeway's tax status underscores another feature of Measure 97, in that it's not evident to people outside a business whether it is subject to taxation or not.

Measure 97's tax applies to companies registered as C-corporations, which are often large businesses, but does not affect a "benefit company" or S-corporation.

There are many distinctions among the various types of companies, and different tax implications for each corporate status. But for our purposes think of it this way:

C-corps frequently have many investors, like a publicly traded corporation.

S-corps have few owners. Sometimes that's a family-owned business, but it can also be a large business controlled by one person or company.

A "benefit company" is a special category of business under Oregon law, established to create public benefits in addition to profits for the owners.

On Tuesday, McGinnis said Safeway is actually a C-corporation, subject to the tax. But she said Albertsons' structure is exempt from the tax. Safeway has 94 stores in Oregon; Albertsons has 31.

McGinnis acknowledged that Safeway and Albertsons had signed off on the incorrect statement from Measure 97's opponents regarding their status.

Safeway and Albertsons have contributed $1.8 million to the "No" campaign fighting Measure 97, as much as any other business.

-- Mike Rogoway

mrogoway@oregonian.com

503-294-7699

@rogoway

* This article replaces a prior article that reported incorrectly, based on information provided to Measure 97's opponents by Safeway and Albertsons, that the grocers are not subject to the tax.