If you want to start and run an Oregon limited liability company (LLC), you'll need to prepare and file various documents with the state. This article covers the most important ongoing reporting and state tax filing requirements for Oregon LLCs.
The State of Oregon requires you to file an annual report for your LLC. You can complete it online at the Secretary of State website. Blank report forms are not available for download; instead, if you go to the online site you can generate a form already containing key information for your LLC. Only a few pieces of information, such as the name and address of your LLC's registered agent, the street address of your LLC's principal place of business, and information about members or managers, are required to complete the report.
The annual report must be filed each year by the anniversary date of your LLC's formation. The filing fee is $100. (There is a higher fee for non-Oregon LLCs.)
When it comes to income taxes, most LLCs are so-called pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. By default, LLCs themselves do not pay income taxes, only their members do. Some states do impose a separate tax or fee on LLCs for the privilege of doing business in the state. Oregon, though, is not one of those states.
However, in some cases, the owners of an LLC choose to have their business treated like a corporation for tax purposes. This choice is made by filing IRS Form 2553 with the IRS. (See the IRS website for the form.) Unlike the default pass-through tax situation, when an LLC elects to be taxed as a corporation, the company itself must file a separate tax return. The State of Oregon, like almost every other state, has a corporation income tax. In Oregon, the corporate tax generally is calculated at a pair of marginal rates. The tax is payable to the state's Department of Revenue (DOR). Use the state's corporation income tax return (Form 20) to pay the tax. For more details, check Nolo’s article, 50-State Guide to Business Income Tax, or the DOR website.
Does your LLC have employees? If so, you'll need to pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not covered here. (But note that federal employer tax obligations start with obtaining a federal employer identification number (EIN).) However, Oregon employers also must pay taxes to the state.
First, you'll need to withhold and pay employee income taxes to the DOR. Begin by registering your business with the DOR either online or on paper (Form 150-211-055, Combined Employer’s Registration). Once you've registered, you'll need to file withholding taxes on a periodic basis (for example, semi-weekly, monthly, or quarterly) using Form OTC (Oregon Tax Coupon). You'll also need to use some version of Form WR each year to reconcile your LLC's tax withholding.
In addition, you'll probably need to register to pay state unemployment insurance (UI) taxes. These taxes are handled through the Oregon Employment Department. You can register for these taxes online or by using Form CBR. Then, each quarter, use Form OQ (Oregon Quarterly Tax Report) and Form 132 (Wage Detail Report) to report on wages and pay the UI taxes. For more information, check the Employment Department website.
Oregon currently is one of just five states that does not charge sales tax. Consequently, unlike LLCs that sell goods in most other states, if your LLC sells goods in Oregon you don't need to worry about paying sales tax to the state.
If you will be doing business in states other than Oregon, you may need to register your LLC in some or all of those states. Whether you're required to register will depend on the specific states involved: each state has its own rules for what constitutes doing business and whether registration is necessary. Often activities such as having a physical presence (a business location) in a state, hiring employees in a state, or soliciting business in a state (such as by telephone, print ads, mail, or the Internet) will be considered doing business for registration purposes. Registration usually involves obtaining a certificate of authority or similar document.
For more information on the requirements for forming and operating an LLC in Oregon, see Nolo’s article, 50-State Guide to Forming an LLC, and other articles on LLCs in the LLC section of the Nolo website.