Oregon has some of the highest tax rates in the country. Not only do they have individual and business taxes, but they also have gross margins tax and additional payroll taxes in certain jurisdictions. They are also one of the few states that also has an estate tax. One of the only benefits Oregon has, is no sales tax.
State Taxes at a Glance – Oregon
|Type of Tax||2022|
|Individual Rates||4.75% to 9.90%|
|Corporate / Business Tax Rates||6.60% to 7.60%|
|Gross Receipts Tax||Yes – CAT Tax of 0.57%|
|Property Taxes||0.94% as a percentage of primary home|
|Estate or Inheritance Tax||Yes – Estate Tax|
State Income Taxes in Oregon
The state of Oregon does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale, with four (4) tax brackets. They range from 4.75% to 9.90%. The highest bracket of 9.90% starts for income greater than $110K. The State of Oregon also imposed Local Income Taxes; however, they are paid through payroll taxes. See below under Payroll Taxes.
State Business Taxes in Oregon
The state of Oregon also has a Corporate Tax rate with only two (2) tax brackets. Net income under $1 Million is taxed at 6.60%, everything above $1 Million is taxed at 7.60%. The Corporate Tax is only assessed on C Corporation. Other flow-thru entities, such as S-Corps, LLCs and LLPs are not subject to the Corporate Tax, however they are all subject to a minimum $150 excise tax for doing business in the state of Oregon.
Corporate Activity Tax in Oregon
In addition to the Corporate Tax and Excise Tax, the State of Oregon also has a Gross Margins Tax referred to as the Corporate Activity Tax (similar to Ohio’s CAT Tax). The CAT Tax is assessed as $250 per entity, plus 0.57% of Gross Receipts over $1 Million. There are certain deductions related to the CAT Tax, learn more about it at the Oregon Department of Revenue website – here.
Sales and Property Taxes in Oregon
Sales Tax – Oregon is one of only four (4) states in the union with no sales tax, yay! The other three are Delaware, Montana & New Hampshire.
Property Taxes in Oregon – The average property tax rate for residential property in the state of Oregon is 0.94%, which is in line with other states as property tax as a percent of a taxpayer’s main home.
Estate Taxes in Oregon
The state of Oregon does have an estate tax that ranges from 10% to 16% depending on the size of the estate. The first $1 Million dollars of the estate is exempt from tax.
Oregon DMV fees
Oregon’s DMV fees are based on how old the vehicle is, not its value. Therefore, the DMV fees are not deductible. To learn more, here’s a link to the Oregon’s DMV website.
If you maintain a permanent place of abode for over 200 days, in aggregate, you are considered an Oregon resident.
Oregon Tax on Social Security Benefits
Even though there is a state income tax in Oregon, they do not assess state income tax on social security benefits.
Payroll Taxes in Oregon
Payroll (Unemployment Insurance) taxes are paid by business on the behalf of their employees to fund unemployment insurance to the state. It consists of multiple factors. Below is an outline of the most common ones in Oregon –
- Wage Base – Oregon’s wage base is $47,700
- New Employers – UI Contribution Tax is 2.10% for all new employers.
- Special Offset Tax – in addition to the UI Rate, there is an additional 0.09% payroll tax.
- UI Rates – range from 1.20% to 5.40%
- Local Income Tax – two the transportation districts impose additional local income taxes that must be paid by employers of workers in those districts. They are 0.0067% in Lane County Mass Transit District & and 0.6918% in Tri-Met Transportation District.
Oregon Business Entities – LLCs
Oregon has an average cost of opening an LLC. Here are some important facts:
- Oregon’s annual LLC fee is $100 a year
- When youregister with the state, you pay a one time fee of $100
- Secretary of State of Oregon – click here
Oregon Tax Contact Phone Numbers
Important phone numbers for the Oregon Department of Taxation:
- Website: www.oregon.gov/dor
- Phone# for Individuals – (503) 378-4988
- Phone# for Businesses – Same