Oregon LLCs face property taxes on both real estate and business-used personal property, with these taxes being assessed by county taxation offices.
Oregon LLCs are relatively inexpensive — especially when you consider that an LLC can protect your personal assets and help grow your business. That’s why forming an LLC is the best choice for most small businesses.
How to Form and Maintain an LLC in Oregon
An Oregon LLC name must include “LLC”, “L.L.C.”, “limited liability company”, or “Ltd. Liability Co.”
If your Oregon LLC name is already in use, you must register a different name or use document that shows permission to use it has been obtained.
You must file Annual Reports for your Oregon LLC each year to the Secretary of State of Oregon. This costs $100 to file online.
An operating agreement in Oregon isn’t required, but drafting one is useful. It ensures all business owners understand how ownership and operation work in the LLC.
Get an EIN – EIN is an Employer Identification Number. The IRS assigns these nine-digit numbers as a standard way to identify businesses for tax reasons.
Tax Implications for Oregon LLCs
Oregon LLCs are taxed as pass-through entities, meaning the business does not pay taxes, but its profits go through to members’ tax returns.
How much your Oregon LLC pays in taxes depends on the tax structure you set up. You may need to pay state taxes like corporate excise tax or state employer taxes. If selling goods or services online, you may need to pay out-of-state sales taxes too.
Oregon collects 7.6% corporate income tax. Twenty states have higher rates.
In Oregon LLCs and S corporations benefit from pass-through taxation so they don’t pay federal income taxes. Instead owners pay taxes.
Starting an Oregon LLC
Is Oregon a good state to start an LLC?
An Oregon Limited Liability Company (LLC) benefits from pass-through taxation. This tax status means the business itself does not pay taxes. Instead the company passes profits and losses onto the owners’ tax returns.
To start an Oregon LLC first choose a business name and check its availability. Then file formation documents called Articles of Organization with the Oregon Secretary of State. The one time filing fee costs $100 to register online.
Next create an operating agreement outlining member rights and duties. Also get an Employer ID Number (EIN) from the IRS for tax reasons. Additionally, acquire any required business licenses and permits.
Other benefits include qualifying for business loans more easily. You also maximize available tax write-offs and gain legitimacy with "LLC" in your company name. Overall, an LLC creates a formal business structure while enabling tax savings.
An LLC offers owners:
- Limited liability protection
- Tax flexibility
- Less paperwork
- Flexible management and profit sharing
LLCs can elect taxation as a partnership, sole proprietorship, S-corp or C-corp. Most adopt partnership or sole proprietorship status for pass-through taxation. The LLC’s income and expenses pass to owners’ tax returns. Owners pay personal income tax on profits.