In Lane County, businesses enjoy having no sales tax, no business inventory tax, moderate corporate and property tax rates, and among the lowest worker’s compensation insurance rates in the country.
Corporate Income Tax
Most corporations are taxed at a rate of 6.6% of Oregon taxable income. For corporations engaged in unitary business and operating in more than one state, Oregon generally follows the Uniform Division of Income Tax Purposes Act in apportioning net income to Oregon. Income derived from foreign (out-of-state) operations is not taxed.
Personal Income Tax
The Oregon State Legislature has adopted the federal definition of taxable income, with a few minor exceptions. The state personal income tax rate varies from 5% to 9% depending on the amount of taxable income.
Only local governments assess property taxes in Oregon. Assessments are based on a percentage of market value (referred to as assessed value). Real property is assessed for the current tax year at 81.7% of its initial market value for industrial property and 71.87% for commercial property. Real property is constitutionally restrained to no more than a 3% annual growth in assessed value.
Unemployment Insurance Tax
Oregon’s Unemployment Insurance Law provides for an employer payroll tax that funds unemployment insurance claims. Most employers are required to contribute to this fund. The tax rate may vary from 1% to 5.4% on the first $20,000 paid to each employee, depending on the experience of the employer and the fund’s condition. New employers are charged the “new employer’s” rate of 3% for approximately the first three years of operation.
Worker’s Compensation Insurance
Nearly all employers doing business in Oregon are subject to the Oregon Worker’s Compensation Law. Businesses must obtain worker’s comp insurance from the State Accident Insurance Fund (SAIF), or any commercial insurance company. Premiums vary by job classification and experience rating. An assessment of $.28 per day, per employee, paid equally by employee and employer, is also collected.
Oregon businesses are now paying 38.9% less for worker’s comp insurance as a result of worker’s comp reform legislation approved in 1990. For employers, positive changes center on requiring injuries to be verified with “clinical evidence” from medical doctors; restricting compensation to injuries directly related to the job; limiting treatment by chiropractors; and forbidding compensation for alcohol-related injuries. For workers, positive changes include a 10% increase in major benefits.
Taxes Not Applicable in Oregon
Oregon’s tax structure excludes certain taxes common to most states. Oregon has no sales tax; no individual personal property tax; no business inventory tax; no levy on intangible property; no taxed admissions to theater or sporting events; no motor vehicle excise tax; no business and occupations tax; no gift tax, no franchise tax; and no poll or capitalization taxes.