THU, MAY 17, 2012
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Doing Business in Forest Grove: Taxes & Payroll

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Federal/State Federal Taxes: All businesses are responsible for meeting federal tax obligations.
Contact: http://www.irs.gov

State Income Tax: The corporate income tax base rate is 6.6%. For tax year beginning January 1, 2009, the top tax rate will be 7.9% on taxable income in excess of $250,000.  In 2011, the top tax rate will drop to 7.6%. Oregon uses a single sales factor business income apportioned in Oregon. Neither the property factor nor the payroll factor is used for computation.

The Oregon Constitution provides a surplus kicker for corporations as a credit on their tax returns if actual revenues for the biennium are 2 percent or more than the forecast. In 2005, all corporations paying Oregon tax will receive a credit against their tax due. The credit is for 35.94 percent.

The state personal income tax ranges from 5-9%. For single returns, taxable income over $6,500 is charged $413 and taxed 9% before returns. For joint returns, taxable income over $13,300 is charged $825 and taxed at 9% before credits. There are 44 credits designed to provide tax relief for specific groups of taxpayers.

There is No state sales, use, inventory or motor vehicles tax.
Contact: http://www.oregon.gov/DOR/BUS/index.shtml

Unemployment Insurance:
Unemployment Insurance funds are collected by the Oregon Employment Department. UI fees are reported and paid quarterly and deposited in a trust fund. The entire cost of unemployment insurance is supported by employers.

  • Taxable Base: $32,100 for 2010
  • Average Rate among existing employers: 2.76%
  • Average Rate among new employers:  3.1%
  • Benefits: Minimum weekly benefit: $98.00, Maximum is $419/week

Contact: http://www.oregon.gov/EMPLOY/UI/index.shtml

Workers Compensation:
Employers are subject to two types of payment to compensate workers injured while on the job.: (1) the insurance premium and premium assessment paid by employers. Insurers calculate the premium assessment fee as a percentage of the insurance premium and is collected by insurers at the same time they collect insurance premiums; and (2) the Workers’ Benefit Fund “cents per hour” (WBF) assessment. This is a payroll assessment and is paid directly to the State.

  • Rates: Premium Assessment is 4.6% for 2009;
  • Workers Benefit Fund assessment: 2.8 cents per hour or partial hour worked
  • Maximum Benefits: Prior to 01/10/02 weekly wage of $712.96; After 01/01/02 weekly wage of $948.24

Contact: http://www.oregonwcd.org

Regional Taxes Transit: Tri-met Transportation District Tax
The transit tax program is administered by the Oregon Department of Revenue for Tri-met. The revenues are used for mass transit in Forest Grove and the Portland Metropolitan area. The tax applies to Portland metropolitan employers and the self-employed. Employers are assessed only for the amount of gross payroll paid for services performed within the Tri-Met district. The transit payroll tax is paid and reported quarterly. The total tax due is figured by multiplying the gross taxable payroll by the current tax rate.

  • Employer tax rate: 0.6318%
  • Self Employment tax rate: 0.6218%

Local Taxes

Property Tax:
Property subject to taxation in Oregon includes all privately-owned real property (land, buildings, and fixed machinery and equipment) and personal property used in business over $13,000. Taxable personal property includes machinery, equipment, furniture, non inventory supplies, movable machinery and libraries used in a business.

There is no property tax on business inventories, household furnishings, personal belongings, licensed vehicles, and certain intangible property including stocks bonds or bank accounts.

The local property tax rate for 2009-10 is $18.3939 / $1000 of taxable assessed value. Of that rate the City of Forest Grove receives $5.3955.


Total Property Tax Rate $18.3939 per $1,000 assessed value
The property tax in Oregon is subject to two limitations. The Oregon constitution limits the amount of property taxes that can be collected from each property tax account. These are Measure 5 limits. The limits are $15.00 per $1000 of Real Market Value. Additional rate for construction bonds up to 10 years or local levy up to 5 years require a public vote. Measure 50 limits the amount of property tax.

Washington County Transfer Tax:
This tax is imposed on each transfer of real property located in Washington County. Transfer or real property means and includes every grant, sale, exchange, assignment, quitclaim, contract of sale or other conveyance or ownership in title to real property. Transfer tax is due within fifteen days of the recording of the instrument transferring real property. Liability for the fee shall attach upon every purchaser or seller.

Tax Rate: one dollar per thousand dollars or fraction thereof, of the selling price.