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The tax was initiated via House Bill 2017, passed in the 2017 Oregon legislative session

A new state transit tax is being withheld from earned wages as of Saturday.

The tax was initiated via House Bill 2017, passed in the 2017 Oregon legislative session. Also known as the "transportation package," the transit tax is geared toward funding investments and improvements in public transportation throughout Oregon, except those concerning light rail. The bulk of these investments will be allocated to maintaining and preserving roads and bridges. Included in this maintenance will be efforts to reduce congestion by widening roads, namely Interstate-5 at the Rose Quarter in Portland. Funds from this tax will also be linked with the state bike tax to improve the safety of off-road paths for bikers.

Although employees will be paying the transit tax, employers will be tasked with treating it like personal income tax. For both residents and non-resident Oregon workers, the tax will appear as a 1/10th of a percent deduction from their wages. This translates to $1 from every $1,000 earned.

For Oregon residents who work outside of the state, they can choose to have the transit tax withheld from their wages as a courtesy, but their employers are not required to do so. When an out of state employer chooses not to withhold the tax, the employee becomes responsible for reporting and paying the tax when they file their annual Oregon personal income taxes.

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