Oregon LLC Taxes: The Complete Filing Guide (2025)
Running a limited liability company (LLC) in Oregon means dealing with taxes at federal, state, and sometimes local levels. This guide simplifies everything you need to know to stay compliant and avoid surprises, from income tax and sales tax to city-specific requirements.
Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes.

Oregon LLC Tax Basics
Navigating your Oregon LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain Oregon’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.
Use the links below to jump directly to the section you need:
- Oregon LLC Taxes at a Glance
- Understanding LLC Taxation Basics
- Federal Tax Obligations
- Oregon State Taxes
- Local Tax Considerations
- Tax Calendar and Filing Tips
- Tax Strategies for Oregon LLCs
- Forms and Resources
Oregon LLC Taxes at a Glance
Tax Type | Rate | Filing Deadline | Forms Required |
---|---|---|---|
Federal Income Tax | 10-37% (personal brackets) | April 15, 2025 | Form 1040 + Schedule C or Schedule E/K-1 |
Self-Employment Tax | 15.3% | April 15, 2025 | Schedule SE |
Oregon Income Tax | 4.75%–9.9% | April 15, 2025 | Form OR-40 |
Oregon Corporate Activity Tax | 0.57% + $250 | April 15, 2025 | Form OR-CAT-1 |
Oregon Pass‑Through Entity Tax | 9%-9.9% | April 15, 2025 | Filed online |
Oregon Corporate Excise Tax | 6.6%-7.6% (min. $150) | May 15, 2025 | Form OR-20 |
Federal Payroll Taxes (If Employees) | 7.65% employer + 7.65% employee (FICA) | Quarterly (April 30, July 31, October 31, January 31) | Form 941 |
Oregon Unemployment Tax (If Employees) | 1.0%–5.4% (new employers: 2.4%) | Quarterly | Form OQ |
Federal Unemployment (FUTA) | 6% on first $7,000 per employee (0.6% after credits) | January 31, 2026 (annual) | Form 940 |
Multnomah County Business Income Tax | 2% | April 15, 2025 | Filed online |
Annual Report | $100 fee | On the LLC’s anniversary date | Filed online |
Understanding LLC Taxation Basics
How Oregon LLCs Are Taxed By Default
Your Oregon LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.
Here’s how it works:
- Your LLC earns income from business activities
- The LLC itself files no tax return (unless you elect otherwise)
- Profits “pass through” to members based on ownership percentage
- Each member reports their share on their personal tax return
- Members pay tax at their individual income tax rates
What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.
Time-Saving Tip: If you’re uncertain about your LLC’s tax classification, a tax professional can review your LLC’s tax setup in 30 minutes and help you choose the most tax-efficient option.
Tax Classification Options
While pass-through taxation is the default, your Oregon LLC can choose alternative tax treatments:
Default LLC Tax Status:
- Single-member LLC: Taxed as a sole proprietorship
- Multi-member LLC: Taxed as a partnership
Optional Tax Classifications:
- S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
- C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)
Oregon Pass-Through Entity Tax Option:
- Optional tax that allows LLCs taxed as partnerships or S Corps to pay tax at the entity level
- Can help overcome the $10,000 SALT deduction limitation
- Must be elected every year (does not carry over automatically)
Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.
Federal Tax Obligations
Income Tax
As a Oregon LLC owner, you’ll report your share of business profits on your personal tax return using:
- Form 1040 + Schedule C (single-member LLCs)
- Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)
Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).
Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.
Self-Employment Tax
LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.
Key points:
- Applies to net earnings of $400 or more
- Calculated on Schedule SE
- You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income
What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.
Employment Taxes
If your LLC has employees, you must:
- Withhold federal income tax
- Pay and withhold FICA taxes (7.65% each for employer and employee)
- Pay federal unemployment tax (FUTA)
- File quarterly employment tax returns (Form 941)
- Provide W-2 forms annually
Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)
Estimated Tax Payments
Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.
Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.
Key deadlines:
- April 15
- June 16
- September 15
- January 15
Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.
Oregon State Taxes
Oregon Income Tax
Oregon has a progressive personal income tax rate of 4.75% to 9.9% that applies to your LLC’s profits on your personal return.
Filing requirements:
- Use Oregon Form OR-40
- Due April 15, 2025
- Oregon follows federal adjusted gross income as a starting point
Bottom Line: For every $1,000 your LLC earns, expect to pay between $47.50 and $99.00 in Oregon state income tax (in addition to federal taxes).
Oregon Pass-Through Entity Tax
This optional tax can benefit many Oregon LLC owners:
- Tax rate: 9% on the first $250,000; 9.9% on income above that
- Paid by your LLC instead of individual members
- Members receive a tax credit on their personal returns
- Helps bypass the $10,000 SALT deduction limitation
- Must elect annually by filing Form OR‑21 by April 15, 2025
Real Savings Example: For an LLC with $200,000 in profits, the Pass-Through Entity Tax could save owners up to $8,500 in federal taxes by working around the SALT deduction cap.
Oregon Corporate Activity Tax (CAT)
If your LLC generates over $1 million in Oregon gross receipts, you’ll need to pay the state’s Corporate Activity Tax.
- Tax rate: $250 flat fee plus 0.57% on gross receipts above $1 million
- Due April 15, 2025)
- File using Oregon Form OR-CAT-1
- Based on gross revenue, not profit (expenses are not deducted)
Oregon Corporate Excise Tax
If your LLC elects to be taxed as a C corporation or S corporation, it will be subject to Oregon’s corporate excise tax:
- Rate: 6.6% on the first $1 million of taxable income; 7.6% on income over $1 million
- $150 minimum tax (even if your LLC has no income)
- File using Form OR-20 (C corps) or OR‑20‑S (S corps)
- Due May 15, 2025
Payroll Taxes
If you have employees in Oregon, you will be responsible for three types of payroll taxes.
Unemployment Insurance Tax
- Register through the Oregon Employment Department
- Rate is 2.4% for new employers (ranges from 1.0% to 5.4% afterward)
- Due quarterly
- File using Oregon Form OQ
Withholding Tax
- Register through the Oregon Department of Revenue
- Based on Oregon personal income tax rates (4.75%-9.9%)
- Due quarterly, monthly, or semiweekly (filing frequency assigned by the state)
Statewide Transit Tax (STT)
- Applies to all Oregon employers
- 0.1% of employee wages
- Paid and filed with Form OQ
Annual Report Filing
While not a tax, your Oregon LLC must file an annual report to stay in good standing with the state:
- $100 filing fee
- Due every year by your LLC’s anniversary date
- File online with the Oregon Secretary of State
Calendar Alert: Missing your annual report deadline can result in late fees or administrative dissolution, so make sure to file on time each year.
Local Tax Considerations
Local Income Taxes
Oregon does not impose traditional city income taxes, but some counties and districts apply income-based taxes that can still affect LLC owners.
Common local LLC taxes include:
- Multnomah County: 2% of net business income
- Metro Supportive Housing Business Tax: 1% of net business income (if gross receipts exceed $5 million)
- City of Portland: $35 flat Arts Tax (on residents earning $1,000 or more)
Filing requirements:
- You do not need to file separate returns
- Multnomah County and Metro taxes are both filed with the City of Portland
- File everything through the Portland Revenue Online portal by April 15
Property Taxes
If your LLC owns real property in Oregon:
- Rates vary by locality
- Assessed annually
- May qualify for various exemptions based on business type
- Personal property tax may apply to business equipment
Tax Calendar and Filing Tips
Key Deadlines for Oregon LLCs
January:
- January 15: Final estimated tax payment for previous year
- January 31: Fourth quarter Oregon UI tax due
- January 31: Issue W-2s/1099s to employees/contractors
- January 31: Fourth quarter federal payroll tax payment due
April:
- April 15: Personal tax returns due
- April 15: Federal income and self-employment tax returns due
- April 15: First quarter estimated tax payment due
- April 15: Oregon PTE-E tax election due
- April 15: Local business tax returns due
- April 30: First quarter Oregon UI tax due
- April 30: First quarter federal payroll tax payment due
May:
- May 15: Oregon corporate excise tax due
June:
- June 16: Second quarter estimated tax due
July:
- July 31: Second quarter Oregon UI tax due
- July 31: Second quarter federal payroll tax payment due
September:
- September 15: Third quarter estimated tax payment due
October:
- October 31: Third quarter Oregon UI tax due
- October 31: Third quarter federal payroll tax payment due
Record-Keeping Checklist
Keep these records for at least seven years:
- Business income records (invoices, receipts)
- Expense receipts and documentation
- Bank and credit card statements
- Asset purchase and improvement records
- Vehicle mileage logs
- Home office documentation
- Payroll records
- Previous tax returns
Tax Strategies for Oregon LLCs
S Corporation Election Benefits
Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:
- File Form 2553 with the IRS
- Pay yourself a “reasonable salary” subject to employment taxes
- Take remaining profits as distributions exempt from self-employment tax
Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.
Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.
Pass-Through Entity Tax Election
Consider electing Oregon’s Pass-Through Entity Tax if:
- You’re affected by the $10,000 SALT deduction cap
- You’re expecting your LLC to generate significant income
- All members agree to the election
Business Expense Deductions
Common deductions Oregon LLC owners often overlook:
- Home office deduction
- Business mileage (70¢ per mile for 2025)
- Health insurance premiums
- Retirement plan contributions
- Professional development expenses
- Business meals (50% deductible)
Forms and Resources
Federal Tax Forms
- Schedule C: Profit or Loss From Business (sole proprietors)
- Form 1065: U.S. Return of Partnership Income
- Schedule K-1: Partner’s Share of Income, Deductions, Credits
- Form 1120-S: U.S. Income Tax Return for an S Corporation
- Form 2553: Election by a Small Business Corporation (S Corp)
- Form 8832: Entity Classification Election
Oregon Tax Forms
- Form OR-40: Oregon Individual Income Tax Return
- Form OR-CAT-1: Oregon Corporate Activity Tax Return
- Form OR-20: Corporate Excise Tax Return
Helpful Resources
Oregon LLC Taxes FAQs
In Oregon, LLCs are usually taxed on a pass-through basis, meaning profits pass through to members’ personal tax returns. However, LLCs can opt to be taxed as C or S corporations, changing their tax obligations.
Oregon business tax is composed of several different types, including property tax, Metro Supportive Housing Services Tax, and state-specific taxes like the Corporate Activity Tax. Additionally, LLCs might face taxes like the TriMet Payroll Tax and environmental permits depending on their operations and location within the state.
The benefits of an LLC in Oregon include flexible pass-through taxation, reducing the burden of double taxation found in traditional corporations. LLCs in Oregon also offer liability protection, separating personal assets from business debts and obligations.
See our Oregon LLC article for more information.
The Business Excise Tax in Oregon is a corporate income tax applied to the net income of businesses operating within the state. For LLCs taxed as corporations, the rate is 6.6% for taxable income up to $1 million, and for income over $1 million, the rate is 7.6% on the excess plus a flat $66,000.
For more information, take a look at our LLC Taxes article.
Need Professional Help? While this guide covers the essentials, tax laws are complex and constantly changing. Schedule a free consultation with 1-800Accountant to ensure your Oregon LLC remains fully compliant while minimizing your tax burden.