Oregon Tax and CPA Services: State, County and City Taxes

Oregon has no general sales tax, but it collects in other ways: a top individual income tax rate of 9.9% for 2025, a gross-receipts Corporate Activity Tax, a long list of payroll contributions and, around Portland, local income taxes stacked on the state return. This page covers tax year 2025 returns (filed in 2026) and 2026 planning.

Income tax and the kicker

2025 rates

For single filers and married people filing separately, Oregon's 2025 charts work like this:

For 2025, joint filers and heads of household use breakpoints of $8,800, $22,200 and $250,000. Oregon does not tax Social Security or Railroad Retirement benefits. Other pension income is taxable, and a retirement income credit may apply depending on age and income.

The kicker on your 2025 return

Oregon returns surplus revenue through the kicker, claimed only on odd-numbered years' returns. On your 2025 return it equals 9.863% of your 2024 tax liability. You must have filed a 2024 Oregon return with liability and must file a 2025 return, even if you otherwise would not need to. Expect no kicker on 2026 returns.

Residents, part-year residents and commuters

Residents pay Oregon tax on income from all sources. Nonresidents pay on Oregon-source income, usually on Form OR-40-N. If you moved into or out of Oregon during the year, the part-year return taxes all income while you were a resident plus Oregon-source income while you were not. Our multi-state and local tax service covers these returns.

Portland-area local taxes

Portland's Revenue Division administers several metro-area taxes, each with its own return.

• Metro Supportive Housing Services (SHS): 1% on Metro taxable income above $125,000 single or $200,000 joint for 2021 through 2025, rising to $128,000 and $205,000 for 2026. It applies if you live in, work in or have income sourced to Metro. A nonresident who telecommutes from a home office for a Metro employer is not taxed on that work.
• Multnomah County Preschool for All: for 2025, 1.5% above $125,000 single or $200,000 joint, plus another 1.5% above $250,000 or $400,000. The county says the rate rises by 0.8% in 2028.
• Withholding: since 2022, employers withhold both taxes only for employees earning over $200,000 or who opt in.
• Businesses: Portland's Business License Tax and the Multnomah County Business Income Tax are net income taxes. Metro adds a 1% tax (tax years from 2021) on net income for businesses with gross receipts over $5 million.
• Clean Energy Surcharge: since 2019, 1% on Portland retail sales, but only for retailers with $1 billion in total gross income and at least $500,000 in Portland.

The CAT, corporate excise and the PTE-E election

For tax years beginning in 2020 and later, the Corporate Activity Tax (CAT) is $250 plus 0.57% of taxable Oregon commercial activity over $1 million, after a 35% subtraction for certain costs. Businesses with $750,000 or less of Oregon commercial activity are excluded from CAT requirements. Since 2013, corporate excise tax has been 6.6% on Oregon taxable income up to $1 million and 7.6% above it, plus $66,000. S corporations that do business in Oregon owe a $150 minimum excise tax.

Oregon's elective pass-through entity tax (PTE-E) is a response to the federal SALT cap. S corporations and partnerships can elect annually on Form OR-21, paying 9% on the first $250,000 of distributive proceeds and 9.9% above (tax years from 2022). Senate Bill 1510 in 2026 extended the program to tax years beginning before January 1, 2028. Read our SALT deduction guide before electing.

Businesses also renew with the Secretary of State each year. Sellers shipping to other states may owe sales tax there; see our sales tax service.

Payroll contributions

New employers get a Business Identification Number from the Department of Revenue before the first paycheck and report through Frances Online each quarter. The main items:

• Statewide Transit Tax: employees pay 0.1% of wages, withheld by the employer. The Employment Department says to keep withholding at 0.1% while a scheduled increase is on hold.
• Paid Leave Oregon (2026): 1% of wages up to $184,500. Employees pay 60%, and employers with 25 or more employees pay 40%. Benefits last up to 12 weeks. See paid family and medical leave.
• Unemployment insurance (2026): taxable wage base of $56,700, with rates from 0.9% to 5.4% and 2.4% for new employers.
• Workers' Benefit Fund (2026): 1.8 cents per hour worked.
• Transit payroll taxes: TriMet's employer rate is 0.8237% (2026) and Lane Transit District's posted rate is 0.80%, on wages and self-employment earnings in each district.

The local payroll taxes guide explains district taxes. County assessors handle property tax, and business personal property is valued at 100% of real market value in the county where it sits on January 1.

How we can help

We prepare Oregon OR-40, OR-40-N and OR-40-P returns, check kicker eligibility, and file Metro and Multnomah County returns. For employers, we set up payroll services that handle transit taxes, Paid Leave contributions and quarterly reporting. We also help people moving between Oregon and California or Washington.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.