Oregon
Taxes and business formation • USA 2025–2026
LLC in Oregon
Corporation in Oregon
Tax system of Oregon
Income Tax
Oregon levies a progressive personal income tax with one of the highest top rates in the U.S. For 2024–2025, rates range from 4.75% to 9.9% depending on income level. In addition, residents of Multnomah County (Portland) pay a regional surtax of up to 3%. Wages, business income, rental income, capital gains, interest, dividends, and other income are all subject to taxation. The state does not provide a standard deduction like the federal government, but offers a number of individual and family deductions.
Sales Tax
One of Oregon's key advantages is that there is no sales tax at all, either at the state or local level. This makes shopping in Oregon attractive for both consumers and certain types of business, particularly retail. However, companies selling goods or services outside the state (into states that do have sales tax) may be required to collect and remit sales tax to other jurisdictions. Our firm provides consultations on economic nexus, registration in other states, setting up sales tax calculations for interstate commerce, and assistance with filing Sales Tax returns in other states when necessary.
Property Tax
Property tax in Oregon is levied at the county and school district level. The average effective rate is about 1.04% of market value, which is nearly in line with the U.S. average. Taxation is based on a limited assessed value regulated by state law (Measure 50), which can restrain tax growth even when a property's market value increases. Commercial real estate requires annual filing of reports on the value of tangible personal property.
Business Taxes
Oregon imposes a Corporate Income Tax on C-corporations with progressive rates: • 6.6% on profits up to $1 million • 7.6% on profits above $1 million. In addition, since 2020 the Corporate Activity Tax (CAT) has been in effect — a tax on companies' gross receipts regardless of profitability: the CAT rate is 0.57% on gross receipts exceeding $1 million, plus a flat amount of $250. All corporations and LLCs are required to file an Annual Report with the Oregon Secretary of State. It is due annually, within the month of the company's registration. Our firm provides services for business registration in Oregon, preparation and filing of the Annual Report, calculation of the corporate tax and CAT, and structuring LLCs/S-corporations with tax implications and planning in mind.
Excise Taxes
Oregon levies excise taxes on fuel, alcohol, tobacco products, cannabis, and certain environmental fees. There is also a heavy vehicle tax, as well as fees on packaging manufacturers and electric power distributors.
Estate / Inheritance Tax
Oregon is one of the few states that still has a state estate tax. It applies to estates exceeding $1 million. The rate is progressive — from 10% to 16%.
Favorable Tax Conditions
Despite the high personal and corporate income tax rates, Oregon offers a number of significant advantages: • No sales tax at all, which makes it beneficial for shoppers and retail companies. • Limits on property tax growth thanks to Measure 5 and Measure 50. • A high CAT threshold (gross receipts above $1 million) reduces the burden on small business. • Numerous tax incentives for startups, sustainable and eco-friendly manufacturers, agriculture, and IT companies.
Compared to Other States
The main advantage compared with other states is the absence of a sales tax. Personal income tax is among the highest in the country. The Corporate Activity Tax replaces a traditional gross receipts tax and requires careful calculation. Property tax is capped in its growth rate but can still be significant in urban counties. An estate tax applies, unlike in most states.
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