SALEM — The Oregon Department of Revenue is reminding Oregon businesses and employers, out-of-state businesses with employees or customers in Oregon, and vehicle and bicycle buyers to make sure they’re ready for four new taxes starting in 2018.
The 2017 Legislature created four tax programs to help fund a statewide transportation package: the bicycle excise tax, the vehicle privilege tax, the vehicle use tax, and the statewide transit tax.
Bicycle excise tax
Oregon’s bicycle excise tax is a flat tax of $15 paid by the consumer at the point of sale. To be taxed, a bike must meet all of the following criteria:
• Be a new bicycle.
• Have two or more wheels that are 26 inches or larger.
• Be exclusively human powered and designed for use on the ground.
• Have a retail purchase price of $200 or more.
Vehicle privilege tax
Oregon’s vehicle privilege tax applies to dealers selling new vehicles in Oregon. The tax is on the privilege of selling and equals one-half of 1 percent (.005) of the retail sales price of the new vehicle. Sales of new vehicles, which must not have been previously registered in Oregon, include:
• Vehicles with 7,500 miles or fewer and a gross vehicle weight rating (GVWR) of 26,000 pounds or less.
• Recreational vehicles and motorcycles.
• Lease sales of new vehicles.
Vehicle use tax
Oregon’s vehicle use tax applies to vehicles purchased outside of Oregon by Oregon residents or for use in Oregon. It applies to any vehicle which, if purchased in Oregon, would qualify for the vehicle privilege tax. The tax may be paid by the out-of-state dealer or the consumer, and it equals one-half of 1 percent (.005) of the retail sales price of the taxable vehicle.
Only some out-of-state dealers will be required to collect and remit the use tax. Others will choose to do so. If a dealer doesn’t collect the tax from the consumer at the point of sale, the consumer must report and pay it directly to the Department of Revenue. Upon payment, the consumer will receive a certificate showing they paid the tax, which the DMV will need to register or title the vehicle in Oregon.
Statewide transit tax
The statewide transit tax takes effect on July 1, 2018. It will be one-10th of 1 percent (.001) of the wages of Oregon residents — regardless of where they’re working — and non-residents who work in Oregon.
Payers of annuities and other periodic payments under ORS 316.189 also must withhold one-10th of 1 percent (.001) of these payments. Employers who fail to deduct, withhold, and remit the tax to the department will be subject to standard penalties. In addition, employers who knowingly fail to deduct and withhold the tax are subject to an additional penalty of $250 per employee, up to $25,000.
Oregon residents working for certain out-of-state employers must self-report and pay the tax when they file their personal income tax return, if their employer chooses not to withhold it.
All new taxes
More information about the transportation-related taxes can be found at www.oregon.gov/dor.
Affected sellers and employers can register, report taxes, and make payments through the department's new web application, Revenue Online.
They can visit www.oregon.gov/dor for more information and to sign up for a Revenue Online account.