New Oregon Transit Tax Effective July 1, 2018

Effective on July 1, 2018, employers in Oregon must start withholding a new transit tax at payroll.  Per the bill, employers must withhold one-tenth of 1 percent or .001 from the following:

·         Wages of Oregon residents (regardless of where the employee lives)

·         Wages of nonresidents who perform services in Oregon

This tax is withheld at the payroll level, so employers are responsible for implementing the tax by July 1, 2018.  Employers are responsible for: withholding the tax from employee wages each period, reporting taxes withheld on quarterly or annual returns, remit taxes quarterly or annually, and reconcile reports on annual reconciliation return.  The penalty for knowingly failing to deduct and withhold the tax is $250 per employee, up to $25,000 for each tax period. 

Additionally, if you are an employer that does not do business in Oregon, but employs employees who reside in Oregon, you are not required to comply with this law.

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