The Oregon State Transit Tax—by law, will be deducted from your paycheck starting on July 1. 2018.
All Oregon employers will start withholding the new statewide “Transit Tax” from each employee’s paycheck starting on July 1st, 2018. (Revenue from this statewide transit tax will go into the Statewide Transportation Improvement Fund to finance investments and improvements in public transportation services, except for those involving light rail.)
How much is the tax?
The statewide transit tax is calculated based on the employee’s wages as defined in ORS 316.162. Employees will notice a one-tenth of 1 percent or .001 deduction from their wages.
Which employees will be taxed?
• Oregon residents—regardless of where their work is performed.
• Non-residents who perform services in Oregon.
Which employees will NOT be taxed?
• The definition of “wages” excludes amounts paid to certain types of employees and independent contractors (ORS 316.162).
• Self-employment income isn’t subject to this tax
• Employees who aren’t subject to regular income tax withholding due to high exemptions
• Employees whose wages are below the threshold for income tax withholding.
What if I work “out of state” but live in Oregon?
• Oregon residents who perform services outside of Oregon can ask their out-of-state employer to withhold the tax from their wages as a courtesy—similar to income tax withholding.
• However, the state of Oregon cannot require out-of-state employers to do so, as they’re outside Oregon’s taxing jurisdiction.
Here is an image of what your stub will look like when the tax is deducted
Call Cardinal 1.800.342.4742 today if you have any questions about this tax.