You won't find the term franchise tax in Oregon's statutes. What most states call a franchise tax, Oregon calls the corporate excise tax—a privilege tax for doing business in the state.
Open an office in Portland, store inventory in Eugene, or pursue profit here, and you owe tax on your net income at 6.6% on the first $1 million and 7.6% above that. There's also a minimum payment starting at $150 and reaching $100,000 based on Oregon sales.
Your Oregon corporate excise tax obligation hinges on one test: are you "doing business" in the state or merely earning Oregon-source income? "Doing business" covers any regular activity aimed at financial gain, like owning property, providing services, or making sales in Oregon. Cross that line, and you must file an excise-tax return and pay at least the $150 minimum, even with zero profit.
If you avoid that threshold yet collect Oregon-source income, you fall under the corporate income-tax regime instead, with identical rates but no minimum tax. The rules exist in the Department of Revenue's guidance on corporate filing requirements.
Entities that typically file include:
Partnerships, sole proprietorships, and disregarded entities file informational or personal returns instead, as the excise tax targets corporations.
Once you confirm your corporation is doing business in Oregon, gather the right paperwork. Most C corporations file Form OR-20. S corporations use Form OR-20-S, insurers file OR-20-INS, and corporations owing Oregon income tax rather than excise tax use OR-20-INC.
Form OR-20 rarely stands alone. You'll attach Schedule OR-AP showing how you apportioned income to Oregon, Schedule OR-AF listing any affiliates, and Schedule OR-ASC-CORP for state-specific additions and subtractions. Other schedules apply based on your specific situation:
Oregon doesn't charge a separate filing fee, but every excise-tax filer owes a minimum tax tied to Oregon sales, even with zero net income. The brackets under ORS 317.090 are:
To find your tier, total the gross receipts you assign to Oregon on Schedule OR-AP. Your final liability is the higher of the calculated income tax (6.6% up to $1 million of taxable income, 7.6% above that) or the minimum above.
For calendar-year corporations, C corporations file Form OR-20 by May 15, while S corporations file Form OR-20-S a month earlier on April 15. Fiscal-year filers get the same window; your Oregon return is due the 15th day of the month following the federal due date.
Filing is just half the battle—you also pay as you go. If you expect to owe at least $500 in Oregon corporate excise tax for the year, make quarterly estimated payments on the 15th day of the 4th, 6th, 9th and 12th months of your tax year. For most calendar-year filers, that means April 15, June 15, September 15 and December 15.
To determine Oregon taxable income, start with federal taxable income and add or subtract Oregon-specific adjustments listed in Form OR-20 instructions, like bonus depreciation add-backs or state-only subtractions. Multiply the result by your Oregon sales ratio (Oregon sales ÷ total U.S. sales) to get apportioned income, then subtract any Oregon net operating loss carryforwards.
Next, apply the corporate rates outlined in the Legislative Revenue Office's corporate tax study: 6.6 percent on the first $1 million of Oregon taxable income and 7.6 percent on any amount above $1 million.
Example: Your company has $10 million of U.S. taxable income, and 15 percent of its sales are in Oregon. Apportioned income is $1.5 million. Tax equals:
Total corporate excise tax: $104,000, unless the minimum tax is higher.
If your calculated income tax falls below the table amount, you pay the minimum. If it exceeds the table, you pay the higher income-based figure. Partial-year operations rarely escape the minimum; a short tax year still triggers the full amount unless the Department grants specific relief.
When tackling your return, you have two options: electronic and paper, but Oregon strongly favors the electronic option. If the IRS makes you e-file your federal return, the state requires the same for your Oregon return.
In general, plan on filing through the Department of Revenue's Revenue Online portal:
The system provides an immediate confirmation number. Save it, as the state doesn't send paper acknowledgements.
Paper filing remains available for qualifying corporations. Print Form OR-20 single-sided, use black or blue ink, and don't staple checks to the return. Mail everything to the Oregon Department of Revenue.
If you include a check or money order, skip the payment voucher OR-20-V. Instead, write your FEIN, tax year, and phone number on the check itself.
Failing to file an Oregon corporate excise tax return can jeopardize your company's legal standing and result in escalating financial penalties. Oregon enforces strict consequences that compound quickly with continued non-compliance.
Financial penalties include:
Oregon's corporate excise tax system includes specific exemptions and special cases that can significantly affect your tax obligations. Understanding these rules can save money and ensure proper compliance.
Tax-exempt entities:
Special obligations:
Pass-through entities must still file informational returns despite tax liability shifting to individual owners. Out-of-state businesses must keep activities strictly within solicitation to maintain exemptions.
Completing your corporate excise return only gets you halfway through Oregon's tax landscape. The state imposes multiple tax obligations, creating a complex compliance burden for businesses of all sizes.
Filing federal Form 7004 automatically gives you an extra six months in Oregon, too. Just check the "Extension" box on your Form OR-20 and include a copy of the approved federal extension when you submit the state return. Oregon doesn't have its own extension form, so there's nothing else to mail.
For an Oregon-only extension, write "for Oregon only" at the top of the return, estimate what you owe, and pay it by the original due date. Remember, an extension moves the paperwork deadline, not the payment deadline. Any unpaid balance accumulates interest and late-payment penalties from the first day.
If the IRS adjusts your federal numbers or you find an error, file a new Oregon return for the same year marked "Amended." Attach revised schedules and a brief explanation of the changes.
Oregon's corporate excise tax and Corporate Activity Tax calculations require detailed financial analysis, including determining minimum tax tiers based on Oregon sales, managing single-sales factor apportionment for multi-state income, and tracking the CAT's receipts threshold alongside quarterly estimated payments.
While Discern can't help you with these filings, we can automate your Oregon annual report deadlines, manage your registered agent requirements, and handle Secretary of State compliance across all states where you operate. Book a demo of Discern today.
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