Oregon State Tax Updates

Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Oregon.

April 27, 2026

Oregon Tax Court Upholds Denial of Taxpayer’s Refund Claim

Authored by: Jessie Racioppi and Bonnie Susmano, JD, MBA

On April 21, 2026, the Oregon Tax Court upheld the Department of Revenue’s denial of a refund claim in Woolum v. Department of Revenue. The taxpayer, an Oregon nonresident, was a member of a pass-through entity that had elected to pay Oregon tax under the Pass-Through Entity Elective (PTE E) regime. The court ruled that, in calculating Oregon taxable income, the taxpayer must add back the full distributive portion of the PTE‑E tax deducted on the federal return. The court rejected apportionment of the add-back, reasoning that its purpose is to fully reverse the federal tax benefit generated by the deduction and therefore it must match the amount that produced that benefit.

The court rejected the taxpayer’s request for a credit on taxes paid to California, his home state, because the credits fully covered his California income tax. As a result, the taxpayer paid no California tax and could not take the Oregon credit for taxes paid to another state.

If you have questions about State PTET elections or the credit allowed for taxes paid to other states, please reach out to a member of the Withum SALT Team.

April 27, 2026

Oregon Changes Filing Due Date for Short-Period CAT Returns

Authored by: Jessie Racioppi and Bonnie Susmano, JD, MBA

Effective May 1, 2026, Or. Admin. Reg. 150-317-1015 amends the filing due date for short-period corporate activity tax (“CAT” – a gross receipts-based tax) returns. Under the new rule, the short-period CAT returns are due on or before the 15th day of the fifth month following the end of the tax period unless the business begins operations mid-tax period. Short-period returns for taxpayers that join a unitary group mid-tax period are due the earlier of:

The due date the taxpayer would have had for its 12-month return; or
The due date of the unitary group’s 12-month return

New businesses that begin operations mid-period and businesses that terminate operations mid-period do not prorate the $750,000 registration, $1 million tax rate, or $1 million filing thresholds for initial or final short period returns.

If you have questions about the Oregon CAT, please reach out to a member of the Withum SALT Team.

April 20, 2026

Oregon Moves Transit Tax Vote to May: Key Payroll Implications

Authored by: Brandon Spinella and Katie Nguyen, CPA

The May 19, 2026, Oregon election includes a referendum on whether to approve increasing the statewide transit tax from 0.1% to 0.2%. The scheduled January 1, 2026, increase was suspended after the referendum qualified for the ballot, and subsequent legislation moved the vote from November to the May primary. Employers with Oregon-based employees and Oregon residents are responsible for withholding, reporting, and remitting the tax to the Oregon Department of Revenue. If voters approve the increase, payroll systems and processes will need to be updated promptly following certification, making advance planning advisable for Oregon employers.

If you have any questions about the Oregon Transit Tax, please reach out to a member of the Withum SALT Team.

April 6, 2026

Oregon Extends PTE-E Tax and Updates Key Tax Provisions

Authored by: Brian Meier, MSA and Courtney Easterday, MSA

Oregon recently enacted omnibus legislation that continues the state’s pass-through entity elective (PTE-E) tax and corresponding credit through the 2027 tax year, providing ongoing relief for eligible owners navigating the federal SALT deduction cap. The legislation also introduces administrative flexibility by allowing pass-through entities to apply tax overpayments toward future estimated tax installments. In addition, Oregon updated its income tax statutes to conform with federal terminology by replacing references to global intangible low-taxed income (GILTI) with the newer concept of net controlled foreign corporation tested income.

Beyond the PTE-E extension, the bill makes several notable policy adjustments across Oregon’s tax code. These include aligning portions of the earned income tax credit statute with the credit’s extended sunset date, broadening the scope of the certified film production development contribution credit to include commercials, and extending the property tax exemption for cargo containers through the early 2030s. Collectively, these changes reflect the state’s efforts to modernize its tax laws while providing continued incentives and tax certainty for businesses and individuals.

If you have questions about how Oregon’s tax changes may affect your business or personal taxes, please contact a member of the Withum SALT Team.

May 13, 2025

Oregon Courts Amends, Restates Microsoft Opinion on Reconsideration

Authored by: Courtney Easterday, MSA and Joe Petrucci

The Oregon Tax Court reaffirmed its prior ruling in Microsoft Corporation v. Department of Revenue that the 20% Subpart F repatriation amount must be included in the denominator of the Oregon sales factor when paid by a controlled foreign corporation (CFC) engaged in a unitary business with a water’s edge group sharing the same primary business activity. The court rejected Microsoft’s additional claims, finding that the assessment fairly represented the taxpayer’s business activity in Oregon and that Microsoft failed to prove entitlement to factor relief or any constitutional violations.

If you have questions about apportionment issues tied to IRC conformity, please reach out Withum SALT Team.

January 30, 2025

Oregon Releases Voluntary Self-Identification Form

Authored by: Jessie Racioppi and Penny Sweeting, CPA

Beginning tax year 2024, Oregon taxpayers will be allowed to voluntarily disclose their race and ethnicity on new Form OR-VSI. The voluntary self-identification program is a response to the 2023 legislation (Senate Bill 1) that allows taxpayers to provide their race and ethnicity when they file their personal income tax returns. Taxpayers can file Form OR-VSI with their tax returns or they can choose to opt out of the program. No form is required for a taxpayer to opt out of the disclosure. The information provided will be compiled annually to assist lawmakers with ensuring equity in the tax policy.

If you have questions about state tax compliance, please reach out to a member of the Withum SALT Team.

October 11, 2024

Oregon – Subpart F Income May Require Sales Factor Denominator Representation

Authored by: Katerine Velasquez and Penny Sweeting, CPA

On September 24, 2024, the Oregon tax court considered the 20% Subpart F repatriation included in state taxable income, which may need to be included in the denominator of the Oregon sales factor under OR. Rev. Stat. 314.665(6). Denominator representation for the 20% Subpart F inclusion is required when the payor is a controlled foreign corporation (CFC) involved in a unitary business with a water’s edge group. A unitary relationship is proved by the CFC and the water’s edge group engaging in similar and/or related lines of business.

If you have questions about how states treat Subpart F income, please reach out to a member of the Withum SALT Team.

Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.