State guide · Oregon · 2026 rules
S corporation in Oregon: what the election changes
Oregon’s state changes are small. Portland and Multnomah County are where the election can cost you, because their owner-pay deduction follows the salary you actually pay.
Choose a state and enter your profit and salary to see the comparison.
The state
An S corporation pays Oregon’s $150 annual minimum tax and no income-based entity tax. A disregarded single-member LLC owes none.
An LLC member is outside Oregon unemployment insurance even after the election: the law excludes service for an LLC by its members, with no election needed and no tax-classification condition. Without state coverage the business gets no federal credit, so federal unemployment tax is the full 6.0% on the first $7,000. The member can elect coverage.
Paid Leave Oregon still applies: a salaried S-corporation owner pays the 0.6% employee share on wages up to $184,500 (no employer share under 25 employees). The 0.1% Statewide Transit Tax is withheld from wages too.
Portland and Multnomah County
The Portland Business License Tax (2.6%) and Multnomah County Business Income Tax (2%) let a sole proprietor deduct owner pay of up to 75% of net business income, capped at $160,500 (Portland) and $158,500 (Multnomah).
After the election the deduction is the lesser of the pay you actually take, 75% of net business income, or the cap. A low salary means a smaller deduction and a higher tax.
Transit taxes
In the TriMet district a sole proprietor pays 0.8237% of net self-employment earnings (Lane Transit District: 0.80%). After the election the S corporation pays the employer transit tax on your wages only.
Worked examples
A single-member LLC owner, single filer, 22% federal bracket, default payroll and return costs. The figure is total tax and added costs as an S corporation compared with staying as you are.
| Profit / salary | Statewide | Portland and Multnomah |
|---|---|---|
| $80,000 / $45,000 | $185 lower | $163 lower |
| $120,000 / $60,000 | $2,481 lower | $1,846 lower |
| $200,000 / $90,000 | $7,052 lower | $5,684 lower |
Starting payroll in Oregon
One Combined Employer’s Registration (form 150-211-055) covers the Department of Revenue (withholding, transit taxes) and the Employment Department (unemployment, Paid Leave).
Oregon’s pass-through entity elective tax (9%, 9.9% above $250,000) runs through tax year 2027. The calculator leaves it out.
Other states
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- Washington, DC
- West Virginia
- Wisconsin
- Wyoming
Sources
- ORS 317.090(2)(b)
- ORS 314.762(1)
- Oregon DOR, 2026 Oregon Combined Payroll Tax Report Instructions (150-211-155-2, Rev 12-16-25)
- Oregon DOR, Pass-Through Entity Elective (PTE-E) Tax
- Oregon Employment Department, Current Tax and Contribution Rates
- ORS 657.044(1)(c)
- Oregon Employment Department, Payroll Tax Frequently Asked Questions
- Oregon Secretary of State, Oregon Employer’s Guide (Limited Liability Companies and Limited Liability Partnerships)
- Paid Leave Oregon, Common questions
- Oregon DOR, Statewide Transit Tax
- DCBS, Workers’ Benefit Fund
- City of Portland Revenue Division, Instructions for Form SC-2025, Line 14/24
- City of Portland Revenue Division, Instructions for Form SP-2025, Line 26
- City of Portland Revenue Division, Business Tax
- Oregon DOR, 2025 Form OR-TM Instructions (150-555-001-1, Rev. 10-15-25)
- Oregon DOR, 2025 Form OR-LTD Instructions (150-560-001-1)
Federal figures: IRS Publication 15 (2026), Schedule SE and Form 2553 instructions. Every figure was read on an official page and checked a second time. Checked October 24, 2026. How we check facts.