Startup Accounting in Portland, Oregon: State, City, County and Metro Taxes for 2026

A Portland startup taxed as a C corporation answers to four layers of tax: federal income tax, the Oregon corporate excise tax (6.6% of Oregon taxable income up to $1 million, 7.6% above), the Oregon Corporate Activity Tax once Oregon commercial activity passes $1 million, and a set of local taxes on net income. The local layer is the part out-of-state accountants miss: the City of Portland Business License Tax (2.6%), the Multnomah County Business Income Tax (2.0%), and the Metro Supportive Housing Services business income tax (1%) for businesses with more than $5 million of gross receipts.

Oregon has no general sales tax, so a Portland company selling only to Oregon customers has nothing to collect at the register. That advantage stops at the state line. A SaaS company with customers in Washington, Texas or New York still has to test sales tax nexus in those states.

In practice, your books have to answer three questions every month: how much of your revenue is Oregon (and Portland, and Metro) revenue, how much of your payroll and cost of goods supports it, and which entity-level and owner-level taxes those numbers trigger. Everything below was checked against the City of Portland Revenue Division, Metro and the Oregon Department of Revenue in October 2026.

Oregon taxes C corporations doing business in the state through the corporate excise tax, filed on Form OR-20. The rate is 6.6% of Oregon taxable income up to $1 million, and $66,000 plus 7.6% of the amount above $1 million. Oregon taxable income starts from federal taxable income, then applies Oregon additions, subtractions and single-sales-factor apportionment.

Loss-making startups still owe something. Every C corporation pays the greater of the calculated tax or a minimum tax that scales with Oregon sales: $150 if Oregon sales are under $500,000, $500 between $500,000 and $999,999, and rising in tiers to $100,000 for Oregon sales of $100 million or more. S corporations filing Form OR-20-S pay the same minimum.

For example, a seed-stage C corporation with $400,000 of Oregon sales and a $2 million book loss owes the $150 minimum excise tax. The same company at $1.5 million of Oregon sales and still unprofitable owes a higher minimum from the table and is now inside the Corporate Activity Tax as well. The Oregon return is due the 15th day of the month after the federal due date for most calendar-year corporations, so align your federal extension with Oregon's.

The Oregon Corporate Activity Tax (CAT) is a tax on gross receipts, not profit. It is $250 plus 0.57% of taxable Oregon commercial activity above $1 million. Taxable commercial activity is Oregon receipts minus excluded items, then minus a subtraction equal to 35% of the greater of your cost inputs or your labor costs.

The thresholds matter more than the rate for an early-stage company:

• Register with the Oregon Department of Revenue within 30 days of reaching $750,000 of Oregon commercial activity in a year.
• File a CAT return once Oregon commercial activity exceeds $1 million.
• Pay tax once taxable commercial activity, after the subtraction, exceeds $1 million.
• Make quarterly estimated payments if you expect a CAT liability of $5,000 or more. They are due on the last day of the 4th, 7th and 10th months of the tax year and the last day of the first month after year-end (April 30, July 31, October 31 and January 31 for a calendar year).

The annual return is due the 15th day of the fourth month after year-end (April 15 for calendar-year filers). A filing extension is available but does not extend the time to pay.

For example, a Portland SaaS company with $3 million of Oregon receipts and $2 million of labor costs tied to that activity takes a $700,000 subtraction (35% of $2 million), leaving $2.3 million of taxable commercial activity. The CAT is $250 plus 0.57% of $1.3 million, or $7,660, whether or not the company made money. Because the subtraction uses labor costs, your payroll records need to support how much labor relates to Oregon receipts.

The City of Portland Business License Tax (BLT) is 2.6% of net income apportioned to Portland, and the Multnomah County Business Income Tax (MCBIT) is 2.0% of net income apportioned to the county. Both are filed on one combined return with the Portland Revenue Division, due with your federal and state returns (generally April 15 for calendar-year filers), with a six-month extension to file but not to pay. Quarterly estimates for calendar-year filers are due April 15, June 15, September 15 and December 15.

The exemption changed for 2026. In April 2026 the Portland City Council passed Ordinance 192163, raising the BLT gross receipts exemption from $50,000 (unchanged since 2007) to $75,000 for tax year 2026 and $100,000 for tax years beginning on or after January 1, 2027. The MCBIT exemption is already $100,000. Both tests use gross receipts from everywhere, not just Portland receipts, so a venture-backed company with $90,000 of revenue worldwide is exempt from the BLT for 2026 but not from MCBIT, and from 2027 the two line up.

These taxes apply to pass-through entities at the entity level, which is why they matter for S corporations and LLCs as well as C corporations. A C corporation with $500,000 of net income fully apportioned to Portland would owe about $13,000 of BLT and $10,000 of MCBIT on top of Oregon excise tax. The Portland Clean Energy Surcharge, a 1% surcharge on Portland retail sales, applies only to large retailers with $1 billion or more of retail sales everywhere and $500,000 or more in Portland, so it rarely touches a startup.

The Metro Supportive Housing Services (SHS) business income tax is 1% of net income apportioned to the Metro district (parts of Multnomah, Washington and Clackamas counties) for businesses with more than $5 million of gross receipts from everywhere. That $5 million threshold has not changed; the 2025 Metro returns still use it, and Metro's 2026 inflation indexing applies only to the personal tax. Below $5 million, the business tax does not apply. Starting with tax year 2026, the Metro quarterly estimate threshold rises from $1,000 to $5,000.

The personal side reaches founders directly. The Metro SHS personal income tax is 1% of taxable income above $125,000 single or $200,000 joint for 2025, indexed to $128,000 and $205,000 for 2026 and $132,000 and $211,000 for 2027. The Multnomah County Preschool for All (PFA) tax is a personal income tax only: 1.5% on income above $125,000 single or $200,000 joint, plus another 1.5% above $250,000 or $400,000. A scheduled 0.8% PFA increase has been pushed back to 2028.

For a Multnomah County resident with $600,000 of taxable income, the local personal layer is roughly 1% Metro plus 3% PFA at the margin, on top of Oregon's 9.9% top rate. That is the number to use when you compare salary, bonus and equity timing, and it is one reason founders who live in Washington County or Clackamas County see different results from founders in Portland proper.

Oregon does not tax SaaS subscriptions because it has no sales tax, but SaaS revenue still drives most of your Oregon and Portland liabilities. Oregon, the BLT and MCBIT all apportion income using a sales factor, so where your customers receive the benefit of the service decides how much income lands in Portland. The CAT uses its own sourcing rules for commercial activity. If you bill customers in many states, tag every invoice with the customer's location in your billing system from day one.

Three accounting habits make the Portland filings easier:

1. Recognize subscription revenue ratably under ASC 606 and keep deferred revenue on the balance sheet. Investors expect it and it keeps your apportionment data consistent with your financial statements.
2. Track Oregon receipts monthly against the $750,000 CAT registration trigger and the $1 million filing trigger.
3. Code payroll by work location. Employees working in Portland affect city apportionment, and labor costs feed the CAT subtraction.

Outside Oregon, the usual SaaS sales tax rules apply. Washington, Texas, New York and many other states tax some or all SaaS once you cross their economic nexus thresholds, so a Portland company with national customers often has more sales tax work than one in a state that taxes software locally.

An S corporation in Portland files a federal Form 1120-S, an Oregon Form OR-20-S with the minimum excise tax, and the combined Portland/Multnomah County business tax return, because the BLT and MCBIT tax pass-through entities at the entity level. Shareholders then report their share of income on their own Oregon returns at rates up to 9.9%, plus Metro SHS and PFA if they live or earn income in those areas.

That structure has two consequences. First, an S corporation pays local entity-level tax that a sole proprietor would also pay but that many owners do not expect, so plan for the BLT and MCBIT in quarterly estimates. Second, the Metro SHS business tax only applies to S corporations above $5 million of gross receipts; below that, the owners deal with Metro through the personal tax.

An S corporation is a reasonable choice for a profitable services business. It is usually a poor fit for a venture-backed startup: S corporations cannot have corporate or foreign shareholders or preferred stock classes, and S corporation stock is not qualified small business stock. If you plan to raise from institutional investors, a Delaware C corporation registered in Oregon is the standard setup.

Oregon decoupled from two federal tax breaks for tax years beginning in 2026. Senate Bill 1507, signed April 9, 2026, requires Oregon personal income taxpayers to add back gain excluded from federal income under IRC §1202 (qualified small business stock) and disallows federal bonus depreciation for property placed in service in 2026 and later, with the add-back recovered through depreciation over the asset's remaining life. The same bill disconnected Oregon from the federal car-loan interest deduction and updated Oregon's connection date to the Internal Revenue Code.

For founders and early employees, the QSBS change is the big one. Federal law still excludes up to 100% of qualifying gain, but an Oregon resident who sells QSBS in 2026 or later will owe Oregon tax on it at rates up to 9.9%, plus any local personal taxes. Opponents circulated a referendum petition after the bill passed, and the governor's office signaled interest in revisiting QSBS in 2027, so check the current status before you model an exit. We checked this in October 2026.

For the company, the bonus depreciation disconnect creates a book-to-Oregon difference on every significant equipment purchase. Keep a separate Oregon depreciation schedule; your federal fixed asset report will no longer match the state return.

Most of the expensive mistakes we see in Portland are registration and calendar problems, not technical ones. A startup registers with the Oregon Secretary of State and the Department of Revenue, then forgets the city/county business tax account, or misses CAT registration after crossing $750,000 of Oregon activity.

A workable annual calendar for a calendar-year C corporation:

• January 31: fourth CAT estimate (if required) and Q4 payroll filings.
• April 15: federal extension, Oregon CAT return, and the combined Portland/Multnomah County return (or extension) with payment, plus first local estimate.
• April 30, July 31, October 31: CAT estimates.
• June 15, September 15, December 15: local business tax estimates.
• Ongoing: Oregon payroll withholding, the Metro SHS and PFA employer withholding where employees elect or are required to have it withheld, and Oregon unemployment and paid leave contributions.

If you are choosing a firm to run this, our companion guide on finding a Portland CPA for startups covers what to ask. This guide is general information checked in October 2026, not tax advice for your specific facts, so have someone review your apportionment and entity choice before you file.