- General sales;
- Use of equipment or other purchases;
- Inventory or goods in transit;
- Worldwide unitary income;
- Motor vehicle purchase;
- Statewide capital or asset value;
- Intangible properties such as stocks, bonds, or securities.
Oregon's effective business tax rate in terms of direct state and local taxes continues to be among the very lowest for all states in the annual analysis by the Council on State Taxation/Ernst and Young, tied for second-lowest in the 2013 report.
The tax rate on corporate income is 6.6 percent on state taxable income up to $1 million and 7.6 percent above that. Orgon businesses are taxed on the portion of their taxable income derived from sales within the state of Oregon. This corporate income tax is considered “Single Sales Factor” tax, as it only considers Oregon sales in determining corporate income taxes owed to the state. Other states often include additional assets and payroll, making them “multi-factor” taxes.
The minimum tax may now be offset with most types of credits. It ranges from $150 to $100,000 relative to Oregon sales of each of the unitary business’s affiliates that do business in the state, according to a schedule set by law and found at https://www.oregon.gov/dor/bus/Pages/faq-corp.aspx.
Personal income tax rates start at 5 percent, rising to 9.9 percent on income above $125,000(s)/$250,000(j). Same rate applies to capital gains as other personal income. Under legislation enacted in October 2013, somewhat lower tax rates are applied progressively starting at 7 percent on non-passive, pass-through income of most partnerships (S corporations, LLCs and the like, subject to certain criteria) up to $5 million of 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:
- Unemployment insurance - In 2013 - as calculated on the first $34,100 of each covered employee's wages - this tax rate ranges from 2.2 to 5.4 percent for experienced employers with an average rate of 3.08 percent. The 2011 base rate for new employers is 3.3 percent, which changes to a company-specific, experience-based rate after the first 21-33 months of operations.
- Workers' compensation insurance - Oregon has created a system with some of the lowest costs in the country: rates have declined or remained steady for each of the past 20 years. This is a significant 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. Employers must pay at least half of the 3.3 cents/hour tax that supports state services (Workers’ Benefit Fund); the remainder is withheld from employees.
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 3 percent. 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. The tax rates vary by by location, but average around 1.5–1.6 percent of assessed value. Tax abatement programs are available for newly invested property.
Sales and use taxes:
Other than fuel, tobacco, and other assorted excise taxes, Oregon does not levy sales or use taxes.
Oregon State Contact:
775 Summer Street N.E.
Salem, OR 97301-1280
(503) 986-0123 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. This information was last updated November 2014.