Oregon Business Taxes at a Glance
Oregon has no general sales tax, but it relies heavily on income tax, with one of the higher top personal rates in the country. Businesses also pay a gross receipts tax called the Corporate Activity Tax, and the Portland area adds several local income and business taxes. BOMCAS helps Oregon individuals and businesses manage these layers and avoid surprises.
Personal Income Tax
Residents of Oregon pay tax on all their income under graduated brackets, while nonresidents pay only on income from Oregon sources. Capital gains are taxed as ordinary income at the state level. Oregon generally follows federal definitions of income, with additions and subtractions of its own.
Oregon also has the "kicker." When state revenue exceeds the forecast by a set margin, taxpayers receive a credit on their next return, based on their tax from the prior year. Whether a kicker applies is determined after each biennium, so the Department of Revenue announces it in advance of filing season. We claim it when it applies and reflect it in estimated tax planning.
No Sales Tax, With Consequences
Oregon retailers do not collect sales tax on in-state sales. Oregon businesses that sell into other states may still have to register and collect those states' sales taxes once they cross economic nexus thresholds. Oregon consumers who buy in Washington and other states can face questions about the other state's tax. We help Oregon sellers track sales by destination and register in other states where they must.
The Corporate Activity Tax
The Corporate Activity Tax (CAT) applies to businesses with commercial activity in Oregon above a set amount, regardless of entity type. Sole proprietors, partnerships, S corporations, and C corporations can all be subject to it. It is calculated on Oregon commercial activity, essentially gross receipts sourced to Oregon, minus a subtraction for a portion of either cost inputs or labor costs, and a fixed amount plus a rate applies to the excess over the exclusion.
Businesses must register once they pass a lower registration threshold, and they file an annual return and make quarterly estimated payments if they expect to owe tax. Because the CAT is based on gross receipts, it can be due even in a year with losses. We help businesses register, calculate the subtraction, make estimates, and keep records that support how receipts were sourced.
Corporate Excise and Income Tax
C corporations doing business in Oregon pay corporate excise tax on Oregon-apportioned income, with a minimum tax based on Oregon sales. Corporations with Oregon income but no business activity there may owe corporate income tax instead. The CAT and the corporate excise tax are separate taxes, and both can apply to the same company.
Portland-Area Local Taxes
The Portland area adds several local taxes, most administered by the City of Portland Revenue Division:
- Metro Supportive Housing Services personal income tax on residents and on income earned in the Metro district, above high-income thresholds
- Multnomah County Preschool for All personal income tax on higher-income residents and on income earned in the county
- City of Portland Business License Tax and Multnomah County Business Income Tax on businesses operating there
- Metro Supportive Housing Services business income tax for businesses above a gross receipts threshold
- Portland Clean Energy Surcharge for large retailers
Employers in the region have withholding duties for the Metro and Preschool for All taxes, which the Revenue Division explains in its employer guidance. Moving in or out of the Portland area during the year, or working there part-time, requires careful allocation. We prepare these local returns alongside the state return.
Payroll: Transit Taxes and Paid Leave Oregon
Oregon payroll has several items employers in other states do not see:
- Oregon income tax withholding
- Statewide transit tax, withheld from employee wages
- TriMet and Lane Transit District taxes, paid by employers and self-employed individuals in those districts
- Paid Leave Oregon contributions, shared between employees and larger employers
- Unemployment insurance and the workers' benefit fund assessment
We set up each account, run payroll with the right deductions, and file the combined quarterly reports.
Washington Residents Working in Oregon
Many people live in southwest Washington and work in Portland. Washington has no income tax, but Oregon taxes nonresidents on wages earned for work done in Oregon, and the Portland-area local taxes may apply too. Days worked from home in Washington are generally not Oregon-source, so good records of work location matter. We prepare Oregon nonresident returns and review employer withholding for commuters.
Timber, Semiconductors, Wine, and Outdoor Brands
- Technology and manufacturing: apportionment, CAT subtractions, and research credit coordination
- Agriculture, nurseries, and wineries: seasonal payroll, inventory, and CAT treatment of agricultural receipts
- Outdoor, apparel, and consumer products: multistate sales tax for an Oregon-based seller
- Professional services: owner pay, local business taxes, and PTE planning
Bookkeeping for Oregon Taxes
Oregon's taxes rely on several different numbers: Oregon-sourced gross receipts and cost inputs or labor for the CAT, Portland and Multnomah County receipts for local business taxes, and wages by employee location for transit and local withholding. We set up the books to track each one so returns can be prepared without rebuilding the year.
Contact BOMCAS About Oregon
Businesses approaching the CAT registration threshold, Portland-area employers withholding transit and Metro taxes, and Washington residents working across the river can contact BOMCAS for a remote review. Pages for individual Oregon cities and services will follow under this section. Return to the BOMCAS home page or see our United States services. This page gives general information only and does not apply the rules to your facts.
Talk to BOMCAS About Your Oregon Taxes
Have a question about your Oregon filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.