Business Costs

Tax Structure

Oregon does not have ...

  • General sales and use tax
  • Receipts/revenue tax
  • Inventory tax
  • Worldwide unitary tax
  • Motor vehicle excise tax
  • State capital tax on asset value
  • Direct levies on intangible properties, e.g., stocks, bonds

Corporate Income Tax—Single Sales Factor

The tax rate on corporate income of firms doing business in the state is the greater of a minimum tax based on relative sales ($150-$100,000, approximately 0.1%) or an income-based levy of 6.6% on amounts up to $250,000 and 7.9% above that (this second tier switches to $10 million in 2013).

Oregon businesses are taxed on a portion of their total income derived from sales within the state of Oregon. This corporate income tax is considered "Singe 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.

This aspect of the corporate income tax has a tremendous impact for multi-state companies based in Oregon. If a company is headquartered in Oregon but sells products throughout the country, or world, that company only pays Oregon corporate income tax based on the amount of income coming from sales within state lines.

How the tax works:
The state looks at the company's entire federal taxable income, its total sales and its sales derived in Oregon. Then, the state takes the ratio of Oregon sales to total sales and applies that same ratio to the company's total federal income. The result is the company's Oregon taxable income.

Corporate tax information and forms from Oregon Department of Revenue.

Personal Income Tax

Personal income tax rates (2011) start at 5%, rising to 7% on single/joint tax returns with taxable income greater than $3,100/$6,200, and then 9% on income greater than $7,750/$15,500, up to $125,000/$250,000. At that point, the marginal rate is 10.8% on income in excess of that level and 11% on income in excess of $250,000/$500,000. (Starting in 2012, this last bracket disappears and the top rate drops from 10.8% to 9.9%.) The same rate applies to capital gains as other personal income.

Personal income tax information from Oregon Department of Revenue.

Property Tax

Except for voter-approved bond issuances, property taxes are constitutionally limited to no more than 1.5 percent of real market value. The increase in valuation of property for tax purposes is limited to three percent per year. The average tax per $1,000 of taxable value was $15.69 as of the 2008-2009 tax year.

Oregon Department of Revenue information: industrial property, utility property.

Tax abatement programs like the Enterprise Zone and Strategic Investment programs are often available to reduce or eliminate property tax liability.

Property Tax Exemption information and forms from Oregon Department of Revenue.

Additional tax information is available from the Oregon Department of Revenue.