Oregon bike tax to begin Jan. 1

Starting Monday, the state of Oregon will begin collecting taxes on new bike sales.

The revenue from the tax is expected to go towards improving roads and infrastructure, but some local bike enthusiasts wonder what that really means.

River City Bikes is in the business of two-wheel transportation. Starting Monday, the shop will have to start taxing all bikes sold that are over $200.

The biggest question for many: Where exactly does the money go?

"Hopefully cyclists will see it in infrastructure that keeps them safe and drivers will see that we are paying our way, says Alex Criss of River City Bikes. "And then maybe they will be more courteous to us."

Per Oregon state law, not all bikes will be taxed, like children's bikes and BMX bikes with wheels smaller than 26 inches.

The $15 flat rate tax is expected to generate $12.7 million over 10 years and be put right back into roads as a part of a massive transportation package.

But many local bike shops worry the new law could drive business online and out of state.

"It kind of screws the bike shops a little bit because now you are promoting, 'don't shop at your local bike shop, shop online, out of state,' then its putting out money into someone else's economy," says Criss.

Many of the shops KATU spoke with say the tax will be on the receipt, not added into the price of the bike.

The tax officially goes into effect on Monday, January 1.

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