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Oregon State Taxes

Oregon-Income-Taxes

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 5.00% to 9.90%. The highest bracket of 9.90% starts for income greater than $125,000. 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 DelawareMontana New Hampshire.

Property Taxes in Oregon – The average property tax rate for residential property in the state of Oregon is 0.98%, 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.

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 $42,100 
  • 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 0.70% 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 stateyou pay a one time fee of $100
  • Secretary of State of Oregon – click here

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