Oregon Transit Tax
07/01/18
[EasyDNNnewsLocalizedText:Author]: ADP Admin/Monday, July 2, 2018/[EasyDNNnewsLocalizedText:Categories]: [EasyDNNnews:Categories]
Effective July 1, 2018, Oregon workers must pay a Statewide Transit Tax to the state of Oregon at the rate of .001 (0.1%) on income that is subject to Oregon state income tax, even if the employee is exempt from state income tax. The Oregon Statewide Transit Tax has the same Special Compensation and Cafeteria 125 tax liability as Oregon state income tax.
The Oregon Transit Tax is a worker-only tax and the employer is not permitted to pay the tax on behalf of the employee. This Statewide Transit Tax is not related to any Oregon local transit tax such as Lane and Trimet, and for this reason, Oregon workers are subject to the Statewide Transit Tax even if they are also subject to a local transit tax.
In addition, Oregon workers are subject to the Statewide Transit Tax regardless of whether they are exempt from state income tax or state unemployment insurance or are not subject to regular income tax withholding due to high exemptions or because their wages are below the threshold for income tax withholding.
An Oregon worker is one of the following:
- a resident of Oregon, regardless of where services are performed
- non-resident of Oregon, for services performed in Oregon
An Oregon resident who performs services outside of Oregon may ask the employer to withhold transit tax from their wages as a courtesy. If the employer does not withhold the transit tax, the employee file a separate return at the time they file their personal income tax return (April 15).
Additional information can be found on www.oregon.gov
If you need to make employees exempt from this tax, employees MUST be marked as exempt prior to your first payroll in July. Failure to do so will require additional changes to the employee records. Please contact your Payroll Service Representative to make changes to the employees.
Disclaimer: This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.
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