Oregon LLC Taxes

With no state sales tax and easy access to nature, Oregon is a popular place to live as well as start a business. Yet, as more business owners choose to start their ventures within the state, many may find it challenging to understand the business taxes involved. 

Regardless of the size of your business, if you operate a limited liability company (LLC) in Oregon, you’ll need to stay up to date on your finances and pay federal, state, and local taxes. Our guide will help you understand which taxes you must pay for your Oregon LLC.

Recommended: Schedule a free consultation with an accountant to stay on top of your taxes. 

Oregon LLC Taxes Owed

LLCs benefit from pass-through taxation, which means the business’s profits pass through to its members’ individual tax returns. As a result, your LLC itself doesn’t pay taxes to the federal government or the state of Oregon. Instead, LLC owners must pay taxes on their portion of the income generated by the LLC. 

In Oregon, LLC owners can expect to pay the following taxes:

Federal Taxes

Regardless of where your business is located, if you have an LLC within the United States, you will have to pay federal income taxes and federal self-employment taxes. These taxes are reported on your Form 1040.

Federal Self-Employment Taxes

It doesn’t matter if your LLC is a single-member LLC or a multi-member LLC; all LLC members must pay self-employment taxes on their share of the LLC’s profits. The self-employment tax rate is 15.3%. 

Federal Income Taxes

Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets, as well as the percent owed, will change each year.

Oregon State Taxes

Each state has its own laws that dictate how it taxes individuals and businesses. For example, Oregon doesn’t have a state sales tax. Below are some state-level taxes likely to impact your Oregon LLC.

Oregon Income Taxes

Oregon’s state income tax rate is a staggering 9.9%. This puts it among the states with the highest income tax rates in the country.

Oregon Sales and Use Tax

While its state income tax rate is quite high, Oregon doesn’t have a state sales tax. This means consumers don’t have to pay sales tax and businesses don’t have to file sales tax returns. The lack of a state sales tax is a definite advantage for businesses operating in Oregon.

Additional State Taxes

The Oregon Department of Revenue oversees the collection of various state-specific taxes businesses may have to pay, depending on their location, industry, and number of employees. A few examples of these additional taxes include:

  • Amusement Device Tax
  • Hazardous Substance Possession Fee
  • Petroleum Load Fee
  • Timber Harvest Taxes

For more information, visit the Oregon Department of Revenue website.

Oregon Local Taxes

The local laws and ordinances in one Oregon county or city likely will differ from those in another. Regardless of where you live in Oregon, we recommend you check with your local jurisdiction to ensure your business obtains the proper local permits and follows any local regulations that may impact its operations.

Oregon LLC Compliance

You must obey Oregon’s state and local laws in order to maintain your business in good standing. While LLCs technically don’t file taxes with the state, businesses in Oregon must still file an annual report each year.

Oregon LLC Annual Report

All Oregon LLCs must file an annual report with the Oregon Secretary of State each year. You must file online and pay the $100 filing fee.

Annual reports are due on the anniversary of your LLC’s formation every year — otherwise known as the day the state approved your LLC. All LLCs have a 45-day grace period from their due date in which to file their annual report. Failure to file by then will lead to the state of Oregon shutting down your LLC. 

To get your LLC operational again, you’ll need to file a Reinstatement Form, pay a $100 penalty, and file all of your missed annual reports with the associated filing fees. 

For more information, check out our Oregon LLC Annual Report guide.

LLC taxes are complex. While our guide can provide you with important information, we recommend you schedule a free consultation with an accountant to ensure you handle your business taxes correctly.