Overview of LLC Taxation
LLCs in Oregon are taxed as pass-through entities. The profits and losses are reported on each member’s personal tax returns. It’s important to note that Oregon does not have a general sales tax in place.
Initial and Ongoing Costs
Initial Formation Fee
- The initial formation fee for an LLC in Oregon requires submission of documents to the Secretary of State’s office, with expenses ranging based on factors like service type or additional processing requirements.
Ongoing Expenses
- Annual Report: The filing fee is $100.
- Assumed Business Name Renewal: Must be renewed every two years, with a renewal fee of $50.
- Registered Agent Fee: Oregon requires every LLC to have a registered agent. There is no fee if you fulfill the role yourself.
Tax Obligations and Payments
- Business Taxes: Find detailed guidelines on Oregon business taxes, including reporting procedures and tax law changes, in the Business Taxes guide.
- Business Registry Database: Useful for business name searches and availability checks.
- Oregon Tax Payment System: Handles tax payments, cancellations, and payment history.
- Professional Licenses and Permit Directory: For applying or renewing business licenses or permits.
S-Corp Taxation Considerations
LLCs taxed as S Corps in Oregon benefit from pass-through taxation and can distribute dividends without incurring a 15.3% self-employment tax on those dividends. However, owners still pay this tax on salaries.
- To tax your LLC as an S-corp, file Form 2553 with the IRS.
- S-Corporation owners pay Oregon income tax and a minimum of $150 per year in excise tax.
Additional Information
- Business Registry: Useful for searching business names or checking availability.
- Tax Implications: LLCs do not pay taxes directly; profits pass through to members’ tax returns.
- Naming Requirements: An Oregon LLC name must include specific designations such as "LLC" or "limited liability company."
- LLC Duration: The duration is perpetual, but ongoing filings such as Annual Reports are required.
- EIN Requirement: Obtain an Employer Identification Number (EIN) from the IRS for tax purposes.
- Taxes and Fees: LLCs pay a $100 filing fee to the state and must understand their specific tax obligations.
- Dissolution: Requires filing Articles of Dissolution and appointing a registered agent for legal and tax matters. Tax clearance may be required.