In an era of dramatically increased mobility for individuals and businesses alike, that’s not a recipe for success. Workers, business owners, and investors in Portland, Multnomah County, and the Metro region all experience these considerable burdens. Portland has the highest business taxes—on small and large businesses, and pass-throughs and corporations alike—and the second highest top marginal rate on wage income in the country.

Employer Withholding Tax Help

Meanwhile, the greater Portland does oregon have state income tax area’s Metro Supportive Housing Services Tax is a 1% levy on taxable income above $125,000 for individuals and $200,000 for married couples filing jointly. Taxpayers in Multnomah County, which is home to Portland, also pay the Preschool For All Personal Income Tax. For single filers, this is a 1.5% tax on income above $125,000 and 3% on income above $250,000. Married couples filing jointly pay 1.5% on income above $200,000 and 3% on income above $400,000.

Individual Taxes

Oregon’s corporate income tax is a business tax levied on the gross taxable income of most businesses and corporations registered or doing business in Oregon. The Oregon corporate income tax is the business equivalent of the Oregon personal income tax, and is based on a bracketed tax system. Similar to the personal Debt to Asset Ratio income tax, businesses must file a yearly tax return and are allowed deductions such as wages paid, cost of goods sold, and other qualifying business expenses. The personal income tax rate is 1.5% on Multnomah County taxable income over $125,000 for individuals or $200,000 for joint filers, and an additional 1.5% on Multnomah County taxable income over $250,000 for individuals or $400,000 for joint filers. To determine if your address is located in the Multnomah County tax jurisdiction, search your address in Portland Maps. If the search results indicate a jurisdiction of Multnomah County, your address is within Multnomah County’s jurisdiction.

• On November 3, 2020, Multnomah County voters approved a measure to establish a tuition-free preschool program.
• In New Hampshire, only interest and dividends are taxed, whereas Washington solely taxes capital gains.
• As with the business income tax, there is an adjustment to avoid double taxation of the same business income under the tax.
• For non-residents, Multnomah County taxes only your income from Multnomah County sources.
• This tax applies to both domestic and foreign corporations conducting business in the state, with specific rates and filing requirements.
• For details on specific deductions available in Oregon, see the list of Oregon income tax deductions.

Oregon Married (separate) Filer Standard Deduction

The gross receipts tax to fund clean energy programming, enacted in 2019, added a second sizable tax with a narrow geographic focus. The 2025 state income tax rates and brackets apply to income earned from January 1, 2025, through December 31, 2025. It’s important to note that withholding and estimated tax payments throughout 2025 should reflect these rates to retained earnings avoid underpayment penalties. Although gross receipts taxes typically do not allow any deductions from gross sales, the CAT provides a 35 percent deduction for either labor costs or the cost of goods sold.

Levied at a rate of 1 percent, it applies to both individual and corporate income, meaning that it is paid by individual earners, pass-through business owners, and C corporations alike, albeit with different thresholds. The tax is levied on personal taxable income above $125,000 (or $200,000 for joint filers), and on all business net income for businesses with gross receipts (not net income) above $5 million. Oregon collects a state income tax at a maximum marginal tax rate of %, spread across tax brackets. Like the Federal Income Tax, Oregon’s income tax allows couples filing jointly to pay a lower overall rate on their combined income with wider tax brackets for joint filers. For 2021, employers have been asked to offer employees the option of having these income taxes withheld as soon as their payroll systems can be configured to capture and remit the taxes withheld. Individual taxpayers can make estimated tax payments for the amount owed for tax year 2021; however, penalties will not be imposed for estimated tax payments not made in 2021 provided the tax is paid with the annual return due April 15, 2022.

• To calculate their total tax, they need to add up the taxes owed for each bracket.
• Individuals who are liable for the tax must file a separate Multnomah County PFA personal tax return and pay the tax to the City of Portland Revenue Division to be in compliance with the tax law.
• Visit our Heavy Vehicle Use Tax page for more information about the filing and payment requirements.
• Tax brackets for earnings under under $125,000 are indexed for inflation and adjusted yearly, while tax brackets over $125,000 are only changed explicitly by statute.
• The payment plan due date is the 5th or the 20th of the month, at least 16 days after the date the payment plan was set up.