Oregon Basic Business Taxes 2010
Oregon's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include an income tax, payroll tax, and property taxes.
Area Development Research Desk (Feb/Mar 10)
Oregon does not have taxes on:
• General sales;
• Use of equipment or other purchases;
• Receipts/revenue tax (like Washington State B&O tax);
• Inventory or goods in transit;
• Worldwide unitary income;
• Motor vehicle purchase;
• Statewide capital or asset value;
• Intangible properties, such as stocks, bonds or securities.
The tax rate on corporate income of firms doing business in the state is 6.6 percent (minimum payment = $150). Amounts over $250,000 are taxed at 7.9 percent. To apportion income for corporations with multi-state operations, Oregon relies 100 percent on relative interstate sales-i.e., single-sales factor with throwback rule in adherence to Uniform Division of Income Tax Purposes Act (UDITPA). Consequently, additional corporate assets or payroll in Oregon does not increase tax exposure.
Personal income taxes supply most of the operating revenue for state government and for public education. Maximum personal income tax rate is nine percent on single returns, and increase to 11 percent on amounts over $250,00 (single) and $500,000 (joint), with taxable income greater than $7,300, or joint returns, greater than $14,600, in 2008. Same rate applies to capital gains as other personal income.
In addition to federal withholdings and minor payroll-based rates in a few county-regional transit districts, the following apply to businesses with employees in Oregon:
In 2008-as calculated on the first $30,200 of each covered employee's wages-this tax rate ranges from 0.7 to 5.4 percent for experienced employers with an average rate of nearly 1.7 percent. The 2008 base rate for new employers is 2.1 percent, which changes to a company-specific, experience-based rate after the first 21 to 33 months of operations.
Workers' compensation insurance:
Oregon has created a system that is a benefit to employers, who may purchase coverage from any provider qualified to write workers' compensation insurance. Alternatively, the State Accident Insurance Fund (SAIF), a public, non-profit corporation, offers coverage, and qualifying large employers may receive certification as self-insured. Actual premiums will depend on the insurance carrier and on industrial and occupational classifications. Employee/employer withholding of $0.014/hour (each) supports state services.
Tangible real and (business) personal property, unless specifically exempted, is subject to local taxation by counties, cities, schools and other districts. Registered vehicles and inventories, including raw materials, goods-in-process and finished products, are entirely exempt. Taxable property is always assessed at an amount equal to or less than real market value. A lower ratio may apply, because any annual appreciation in taxable value may not exceed three percent. The taxable value of new property is determined based on the county's average ratio of assessed value to real market value (AV/RMV) for all property with the same classification (e.g., residential); for new industrial property, the initial AV will typically be at or near 100 percent of RMV. Additionally, the State Constitution caps every property tax bill at not more than 1.5 percent of RMV, aside from levies for voter-approved bond issuances.
Sales and use taxes:
Other than fuel, tobacco, and other assorted excise taxes, Oregon does not levy sales or use taxes.
Oregon State Contact:
Oregon Economic and Community Development Department
775 Summer Street N.E.
Salem, OR 97301-1280
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.