With a business-friendly environment, active startup community, and lower cost of living compared to its neighbors to the north and south, it’s little wonder why Oregon attracts so many aspiring entrepreneurs.
But if you have dreams of launching a successful venture in the Beaver State, you’ll want to get familiar with the state’s tax laws, too. After all, failing to meet these guidelines can sink your business before it has a chance to thrive. So, keep reading to learn everything you need to know about Oregon’s small business taxes, including:
Do businesses pay taxes in Oregon?
Nearly all businesses in Oregon pay taxes to the state government, just like they would in other states.
But in addition to the income and employer taxes most business owners expect to pay elsewhere, Oregon might charge other taxes depending on your company’s business structure, net income, or industry. On the bright side, business owners in the state won’t have to worry about state or local sales taxes.
Now, let’s look at what state taxes most businesses can expect to pay in Oregon, as well as which businesses are required to pay them, when the taxes are due, and how to file your returns.
Oregon personal income tax
Generally, pass-through entities like sole proprietorships, partnerships, and limited liability companies (LLCs) don’t pay state income taxes themselves. Instead, the business’s tax obligations pass through to their owners or members, who pay the taxes on their personal returns at the state’s individual tax rates.
In 2023, individual income tax rates in Oregon range from 4.75% to 9.9% of a taxpayer’s taxable income.
How to file and pay
Individual income tax returns (Form OR-40 for residents, Form OR-40-P for part-year residents, and Form OR-40-N for nonresidents) are due by the 15th day of the fourth month after the fiscal year ends. For companies that follow the calendar year, the due date is April 15.
These returns can be filed through an authorized e-file provider, authorized tax preparation software, or by mail. If you want to submit your return by mail, send the completed tax form to the appropriate address listed on the return.
Taxpayers who expect to owe $1,000 or more in income taxes must make estimated tax payments quarterly. Estimated taxes must be submitted by the 15th day of the fourth, sixth, and ninth month of the fiscal year as well as the 15th day of the month following the end of the fiscal year.
All personal income tax payments—including estimated tax payments—can be paid through the Department of Revenue’s Revenue Online (ROL) system or by mail. If you plan on mailing your tax payments separately from your return, include payment voucher Form OR-40-V with your payment and send both to the address below:
Oregon Department of Revenue
PO Box 14950
Salem, OR 97309-0950
Get answers to frequently asked questions and other information about the Oregon personal income tax by visiting the Department of Revenue (DOR) website.
Oregon partnership minimum tax
On top of their business owners’ income tax obligations, partnerships, S corporations, and LLCstaxed as partnerships or S corporations are required to file an additional partnership tax return in Oregon.
These businesses may also be required to pay the $150 partnership minimum tax (or PMT) if they meet one of the following conditions:
- Has done business in Oregon in the past year
- Has one or more partners that reside in Oregon
How to file and pay
State partnership returns (Form OR-65) are due on the 15th day of the third month after the end of the company’s fiscal year. For calendar filers, the deadline is March 15.
Tax returns can be filed electronically through the IRS modernized e-file (MeF) platform or by mail. Note that, if you’re required to file your federal partnership return electronically, you must file your state return electronically as well. Mailed returns can be sent to the following address:
Oregon Department of Revenue
PO Box 14555
Salem, OR 97309-09 40
Make any partnership tax payments online via ROL or send them to the DOR by mail. If you prefer to mail your tax payments, send it (along with payment voucher Form OR-65-V) to this address:
Oregon Department of Revenue
PO Box 14950
Salem, OR 97309-0950
More information on the Oregon partnership minimum tax can be found on the DOR website.
Oregon pass-through entity elective tax
Recently, Oregon passed a new tax law that allows partnerships, S corporations, and LLCs taxed as a partnership or S corporation to pay their income taxes at the entity level—rather than passing the income tax burden onto the business owners.
The new tax, known as the pass-through entity elective (PTE-E) tax, levies a 9% tax on the first $250,000 of the business’s distributive proceeds and a 9.9% tax on proceeds over $250,000. Qualifying members of businesses that take this election are then eligible for a tax credit on their share of the business’s proceeds.
One thing to keep in mind: PTE elections only apply to the year they’re made. So if your business wants to keep the pass-through entity tax election, you must make the election every year by filing your PTE-E return timely.
How to file and pay
If you want to take the PTE election, first you’ll need to register your business for the PTE-E tax by going to the ROL webpage. The Department of Revenue provides a step-by-step PTE-E registration guide on its website.
PTE-E returns (Form OR-21) are due on the same day the personal income tax returns are due. For most businesses, this deadline is April 15. Tax returns and any payments are submitted via ROL.
Businesses that make the PTE election must also make estimated tax payments to cover its tax liability. These payments are due April 15, June 15, September 15, and January 15 and can be submitted via ROL or mail. Those who plan to mail their tax payments should include Form OR-21-V and send both to the address below:
Oregon Department of Revenue
PO Box 14950
Salem, OR 97309-0950
For more information on the Oregon PTE-E tax, visit the Department of Revenue website.
Oregon corporate excise and income tax
Corporations that do business in the state or receive income from Oregon sources must file an Oregon corporate tax return. However, the tax return a corporation files depends on several factors:
- Companies that do business in Oregon file an excise tax return and pay taxes on their net income. These businesses are also subject to a corporation minimum tax.
- Companies that don’t do business in the state but receive income from sources in Oregon file income tax returns. These businesses are not subject to a corporation minimum tax.
Collectively, these taxes are known as the Oregon corporate excise and income tax (or CET).
C corporations pay a 6.6% tax rate on taxable income up to $1 million, a 7.6% rate on business income over $1 million, plus an additional $66,000 fee. Additionally, corporations that report net losses or no net income for the fiscal year are still responsible for paying a minimum tax based on their total sales. Companies with total sales under $500,000 pay a minimum tax of $150, while those with sales over the $500,000 threshold pay a minimum tax that ranges from $500 to $75,000.
In Oregon, S corporations typically aren’t subject to the corporate excise and income tax because their tax obligations are passed on to their shareholders. However, these entities must pay a $150 minimum excise tax.
How to file and pay
Oregon corporate excise tax returns, corporate income tax returns, S corporation returns, and all tax payments are due on the 15th day of the month after the due date for the corresponding federal tax return. So, for example, if your C corporation follows the calendar year, your federal tax return is due on April 15, and your Oregon corporate tax return is due on May 15.
Corporations that are required to file their federal returns electronically via MeF must also file their Oregon returns the same way. If you don’t meet this requirement and prefer to file by mail, send your tax return along with any payments to the appropriate address on the tax form.
Corporations that expect to owe $500 or more in corporate taxes for the year must make estimated tax payments each quarter. These payments are due on the 15th day of the fourth, sixth, ninth, and 12th months of the fiscal year. Submit your estimated tax payments online via ROL or electronic funds transfer (EFT).
As with the filing guideline, corporations that must pay their federal estimated taxes by EFT must use the same payment method for their state estimated taxes as well. If your business doesn’t meet this requirement and you want to pay your taxes by mail, send your payment along with a completed Form OR-20-V to this address:
Oregon Department of Revenue
PO Box 14950
Salem, OR 97309-0950
Find more information and answers to frequently asked questions about the Oregon corporate tax by visiting the DOR corporate excise and income tax webpage.
Oregon corporate activity tax
In contrast to the corporate excise tax, Oregon’s corporate activity tax (CAT) is only assessed on the income of any company that does business in the state and makes over $1 million in taxable Oregon commercial activity.
Businesses that meet this threshold pay a $250 fee plus 0.57% of all Oregon commercial activity over $1 million. The Department of Revenue allows these companies to subtract 35% of their tax liability for certain business expenses, though.
How to file and pay
All businesses with $750,000 or more in Oregon commercial activity must register for the corporate activity tax. If your company meets this income threshold, follow the instructions in the CAT registration guide to register your business for the tax.
However, not all businesses that register are required to file and pay the CAT, as only businesses that meet the $1 million state commercial activity threshold file corporate activity tax returns.
These returns (Form OR-CAT) are due on the 15th day of the fourth month following the end of the fiscal year. File your returns through an authorized e-file provider or by mail using the appropriate address in the DOR’s corporate activity tax return instructions.
Companies that expect to pay $5,000 or more in corporate activity taxes must pay estimated taxes by the last day of the fourth, seventh, and 10th months of the fiscal year, as well as the last day of the first month after the fiscal year ends. These payments must be made online via ROL or sent by mail. If you pay your taxes by mail, send your payment and Form OR-CAT-V to this address:
Oregon Department of Revenue
PO Box 14950
Salem, OR 97309-0950
To learn more about the CAT, go to the Department of Revenue website.
Withholding tax
Companies with employees in Oregon must withhold income from these employees’ wages and pay it to the Department of Revenue as withholding taxes (also known as payroll taxes or employment taxes).
The withholding tax rate differs between employees because it’s based on factors like the employee’s wages and withholding allowances.In 2023 the withholding rate ranges from 4.75% to 9.9%.
How to file and pay
Oregon employers must apply for a business identification number (BIN) through the Revenue Online platform before collecting withholding taxes from their employees. The DOR has created a YouTube video outlining how to get a BIN to help streamline the process.
Once they receive their BIN, companies report withholding taxes through Frances Online, the state’s new payroll tax reporting system.
Withholding tax returns (Form OQ) and payments are due by the last day of the month after the end of the calendar quarter (i.e., April 30, July 31, October 31, and January 31). Payroll tax returns are filed on Frances Online, while tax payments are made via ROL. Note that all registered employers must file their quarterly reports, even if they have no payroll to report for the tax period.
If you want to file your returns by mail, send the completed tax forms and any payments to the following address:
Oregon Department of Revenue
PO Box 14800
Salem, OR 97309-0920
Employers must also file Form WR via ROL by January 31 each year.
Visit the Department of Revenue website to learn more about the Oregon withholding tax and the state’s filing guidelines.
Unemployment insurance tax
Oregon employers are also required to make state unemployment insurance contributions to the state’s Unemployment Insurance Fund. These tax payments cover unemployment benefits for eligible workers who leave the company.
In 2023, new employers pay a 2.1% tax on the first $50,900 of each employee’s wages. The tax rates for established employers range from 0.7% to 5.4%.
The 2024 tax rate for new employers is 2.4%, while established employers will pay a tax rate ranging from 0.9% to 5.4%. The taxable wage base for the 2024 tax year will increase to $52,800.
How to file and pay
Unlike many other states, Oregon combines the tax form for unemployment taxes with several other employer taxes (including withholding taxes), so the due dates and filing guidelines for this tax are similar to those for the withholding tax. However, you won’t need to file a year-end reconciliation report as part of your unemployment tax obligations.
Learn more about the Oregon unemployment tax by going to the Department of Revenue website.
Other industry-related and local taxes
Depending on your company’s industry, products or services sold, and business activities, you may be responsible for other taxes levied by the state. These taxes include:
- Amusement Device Tax
- Emergency Communications (E911) tax
- Hazardous Substance Possession Fee
- Lane County Transit District Payroll Tax
- Marijuana Tax
- Cigarette Tax
- Bicycle Excise Tax
- TriMet Transit District Payroll Tax
- Insurance Excise Tax
In addition to the business taxes assessed by the state, many cities and counties in Oregon impose their own taxes on companies that operate within their jurisdictions. For example, many municipalities charge local income or property taxes.
A complete list of Oregon industry taxes is available on the Department of Revenue webpage for businesses. However, because the taxes mentioned in this section are determined by the location and nature of your business, it’s best to talk to your accountant or tax advisor for a comprehensive look at your business tax obligations.
Oregon business tax breakdown by business type
Filing and paying business taxes on time can be stressful, even for small business owners with decades of experience under their belt. To help make things easier for you, below is a chart breaking down which state taxes different business entity types can expect to pay.
Keep in mind that pass-through entities don’t pay federal income taxes either. Similar to Oregon’s setup, the federal tax obligations for these businesses are passed on to their business owners, who pay taxes through their personal returns.
| Business type | Personal income tax | Partnership minimum tax | Pass-through entity elective tax | Corporate excise and income tax | Corporate activity tax | Withholding tax | Unemployment tax | Federal income taxes |
| C corporation | No | No | No | Yes | Yes, if it meets the income threshold | Yes, if you hire employees | Yes, if you hire employees | Yes |
| S corporation | Yes (pass-through), if not paying the PTE-E tax | Yes | Yes, if it makes the PTE-E election | Yes, pays the minimum excise tax | Yes, if it meets the income threshold | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| LLC | Yes (pass-through), if not paying the PTE-E tax | Depends on how it’s structured | Yes, if it makes the PTE-E election | Depends on how it’s structured | Yes, if it meets the income threshold | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| Partnership | Yes (pass-through), if not paying the PTE-E tax | Yes | Yes, if it makes the PTE-E election | No | Yes, if it meets the income threshold | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| Sole proprietorship | Yes (pass-through) | No | No | No | Yes, if it meets the income threshold | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
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