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Oregon Tax Guide
High income tax + CAT

Oregon —
no sales tax, but one of the highest income tax rates plus the CAT.

Oregon has no sales tax — a major advantage for product businesses. But it has a top income tax rate of 9.9% and the Corporate Activity Tax (CAT) — a gross receipts tax that applies to businesses over $1M in revenue and surprises most founders who hit that milestone.

9.9%Top income tax rate
0%Sales tax
0.57%CAT rate
$1MCAT threshold
Other state guides
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Oregon's biggest advantage — no sales tax. Oregon is one of five states with no sales tax. For product businesses this is a massive operational simplification — no collection, no remittance, no return filing. Customers also love the clean pricing.
9.9%
Top income tax rate
On income over $125,000 (single). One of the highest in the US
0%
Sales tax
Oregon has no state or local sales tax — a rare and valuable advantage
0.57%
CAT rate
Corporate Activity Tax on gross receipts over $1M. On the excess above $1M only
6.6%–7.6%
Corporate income tax
C-Corps on Oregon taxable income. 6.6% on first $1M, 7.6% above that
$100
LLC annual renewal
Due anniversary date of formation with Oregon Secretary of State
1%
Portland metro tax
Preschool for All income tax on high earners in Metro area — stacks on top of state
The CAT tax catches growth-stage businesses completely off guard. Oregon's Corporate Activity Tax applies to businesses with Oregon gross receipts over $1 million. If you hit $1M in revenue, you suddenly owe a gross receipts tax on every dollar above that — and it requires quarterly estimated payments.

Oregon Corporate Activity Tax (CAT) — complete guide

The CAT was introduced in 2020 and applies to most businesses with Oregon commercial activity. It's a gross receipts tax — meaning it's calculated on revenue, not profit.

$0
Under $750k Oregon receipts
No CAT owed and no return filing required below this threshold
$250
$750k – $1M Oregon receipts
Flat $250 minimum CAT. Return filing required even at this level
0.57%
Over $1M Oregon receipts
$250 + 0.57% of Oregon receipts over $1M. Calculated on the excess only
The CAT has a 35% subtraction for labor costs. You can subtract 35% of your cost of goods sold or labor costs (whichever is applicable) from your Oregon commercial activity before calculating the CAT. This significantly reduces the tax for businesses with high labor costs.
CAT requires quarterly estimated payments. Once your Oregon commercial activity exceeds $1 million, you must make quarterly CAT estimated payments — April 30, July 31, October 31, January 31. Missing these triggers a 5% underpayment penalty. Most founders discover this for the first time when they file their annual CAT return and owe back quarters.
Register for a CAT account at oregon.gov/dor as soon as you expect your Oregon commercial activity to exceed $750,000. Registration is free and opens the portal for quarterly payments and annual return filing.

Portland and Metro area additional taxes

Portland-area founders face the most complex local tax stack in Oregon. On top of federal, Oregon state, and CAT taxes, Portland and the Metro area have their own income taxes that stack on top of everything else.
1%
Metro Supportive Housing Services Tax
On individual income over $125k (single). Metro area only
1.5%
Multnomah County Preschool for All
On individual income over $125k. Multnomah County only
2.6%
Portland Business License Tax
On net income from Portland business activity over $50k gross revenue
0.5%
Multnomah County Business Income Tax
On net income from Multnomah County business activity — stacks on BLT
A Portland founder earning $200k in net profit could be paying: 37% federal + 9.9% Oregon state + 2.6% Portland BLT + 0.5% Multnomah + 1% Metro SHS + 1.5% Preschool for All = combined marginal rates exceeding 50%. Understanding this stack is critical for pricing and planning.

Oregon forms and key deadlines

OR-40
Oregon Individual Income Tax ReturnFull-year Oregon residents. Includes Schedule C business income. Required if you have any Oregon income above the filing threshold. File at oregon.gov/dor.
Apr 15
OR-CAT
Oregon Corporate Activity Tax ReturnRequired if Oregon commercial activity is over $750k. Annual return due April 15. Quarterly estimated payments required if CAT owed exceeds $5,000.
Apr 15
OR-20-S
S-Corporation Tax ReturnOregon S-Corps file their own state return. Reports Oregon income and the $150 minimum excise tax. Due March 15.
Mar 15
OQ
Oregon Quarterly Tax ReportEmployer payroll return. Reports withholding, UI, and workers benefit fund contributions. Due last day of month following quarter.
Quarterly
CAT-EST
CAT Quarterly Estimated PaymentRequired if annual CAT liability exceeds $5,000. Due April 30, July 31, October 31, January 31. Pay through Oregon Revenue Online.
Quarterly

Key tips for Oregon founders

No sales tax is a genuine competitive advantage. Oregon is one of only five states with no sales tax. If you sell products, Oregon is dramatically simpler than most states — no collection system, no filings, no nexus concerns.
The CAT is a surprise tax for growing businesses. Most Oregon founders don't know about the CAT until they hit $1M in revenue. At that point they're looking at a new gross receipts tax, quarterly estimated payments they weren't making, and potentially back penalties. Model this into your projections before you hit the threshold.
Oregon allows a 35% labor subtraction on CAT. If your business has significant labor costs, this subtraction substantially reduces your CAT liability. A service business with 60% labor costs can reduce its CAT taxable base by 35% — make sure your CPA is using this.
Portland founders face the most complex local tax stack in Oregon. Portland BLT + Multnomah County + Metro SHS + Preschool for All can add 4%–5% to your effective tax rate on top of state and federal. If you're a high-income Portland founder, the combined marginal rate can exceed 50%.
S-Corp election works the same in Oregon as federally. Oregon recognizes the federal S-Corp election. You'll need to file Form OR-20-S annually but the SE tax savings from the election apply just as they do everywhere else. At Oregon's 9.9% top rate, the combined federal + state savings make the election very valuable for profitable founders.