The Greater Portland region straddles the mighty Columbia River and includes the states of Oregon and Washington. The region's bi-state composition gives local businesses a distinct advantage: the opportunity to consider two tax codes to determine a best fit.
In Oregon, corporate business tax accounts for less than 3.5 percent of the gross state product, compared with 4.7 percent for California and 4.9 percent for Texas
Business owners will find that both Washington and Oregon state and have designed their tax codes to attract and retain companies and business partnerships. As a result, Oregon and Washington state tax structures rank as some of the most affordable business-friendly tax structures on the West Coast according to Tax Foundation.
Recently, the Portland City Council voted to adopt proposed changes for the City of Portland, Multnomah County, and Metro taxing authorities to adopt the state’s sales factor apportionment, effective for tax years starting on or after the calendar year of January 1, 2023.
Read more about the tax alignment.
Download Our Tax Structure Comparison Guide
Greater Portland Tax Structure – By the Numbers
Overall Tax Advantages
- Washington: Advantages include no state income tax and relatively low property tax rates. Washington's business tax structure is designed to be business-friendly, ranking among the top in the nation for its pro-growth policies.
- Oregon: Taxpayer advantages include no sales tax, lower workers’ compensation costs, and favorable property tax limitations under Measure 50. Portland’s business tax advantages and Oregon state's commitment to sustainability and a skilled workforce create a favorable environment for business activity growth and investment.
Greater Portland Has a Low Business Income Tax
Depending on location in the Portland area, business income tax rates vary from the lower end of 2% in Oregon to no percentage-based business income tax in Washington. This provides advantages for businesses by allowing them to choose the optimal tax structure for their business activity and partnerships.
Greater Portland Offers Corporate Tax Benefits
Oregon's progressive corporate income tax structure and Washington's gross receipts tax with varying rates provide unique opportunities for businesses. Additional exemptions can help reduce the burden on smaller or growing businesses.
Meanwhile, Washington's gross receipts tax benefits businesses with high sales volumes and narrower net incomes. These states offer complementary tax benefits that can enhance financial planning, encourage growth, and support competitive positioning for businesses operating in these regions.
Greater Portland Businesses Enjoy Low Corporate Income Taxes
With diverse tax structures to choose from, Washington employs a gross receipts tax with rates that vary by industry, while Oregon uses a corporate income tax model, with lower-end rates ranging from 6.6% to 7.6%*. This allows business owners to adopt the best business tax model for their services and partnerships.
Greater Portland Offers Competitive City Business License Fees
The City of Portland Business License Fees/Income Tax, set at 2.6% of net business income with a $100 minimum annually, offers flexibility by scaling with a business's profitability. Other cities in the county charge nominal fees typically based on the number of employee full-time equivalents (FTEs), ensuring manageable costs for Portland businesses of varying sizes. This approach supports businesses by aligning fees with income and maintaining affordability for smaller operations.
Read our tax comparison by county below to learn about the specifics of the business tax structure for Greater Portland Businesses .