• Justin Howe

Oregon Expands Reduced Tax Rates for Pass-Through Businesses

In late May, the Oregon Legislature passed House Bill 4301 during the Special Legislative Session. The bill amended Oregon Revised Statutes 316.043 by expanding the list of pass-through businesses eligible for the reduced tax rate for qualifying business income. Sole proprietorships may now also claim the reduced rate for tax years beginning on or after January 1, 2018, along with S-corporations and partnerships.

The business must be able to meet certain requirements to take advantage of the reduced rates. The rates only apply to nonpassive income attributable to a partnership, S-corporation, or sole proprietorship if the taxpayer materially participates in the trade or business. The business also must have at least one employee who is not an owner, member, or limited partner of the business, who performs at least 1,200 aggregate hours of work in Oregon by the close of the tax year. If those qualifications are met, then the taxpayer may be able to apply the reduced rates on their Oregon tax return.

If you are the owner of a pass-through entity and are curious if your business qualifies for the reduced rate, then set up your consultation with The Howe Law Firm now.

References https://olis.leg.state.or.us/liz/2018S1/Measures/Overview/HB4301



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