Oregon · LLC tax election
Oregon LLC: S corp or C corp?
Oregon puts a flat $150 on every S corporation, and a second tax waits at $1 million of sales.
See Oregon at a glanceShort answer
In Oregon an S corporation pays a $150 minimum excise tax that does not pass through to you, and its income is taxed to the owners. A C corporation pays 6.6% up to $1 million and 7.6% above. The separate Corporate Activity Tax starts only above $1 million of Oregon activity.
Last checked .Oregon at a glance
What is different about Oregon?
Oregon is one of the few states that charges an S corporation a minimum tax and then refuses to pass it to the owners. An S corporation carrying on business in Oregon pays a $150 minimum excise tax, and the state says it does not flow through to the shareholders, so you cannot offset it on your personal return. Beyond that, the S corporation's income is generally taxed to the shareholders, with entity-level tax only on built-in gains and excess net passive income when those apply. Oregon also has a Corporate Activity Tax for every entity type, which is $250 plus 0.57% of taxable Oregon commercial activity above $1 million, so a company under $1 million never pays it.
Does Oregon recognize a federal S corp election?
Oregon recognizes the S corporation, and its income is generally taxable to the shareholders instead of the corporation. The entity still files Form OR-20-S and pays the $150 minimum excise tax, which does not flow through to the owners. It also pays tax on income from built-in gains and excess net passive income if that income is taxed on the federal S corporation return. Credits cannot reduce the S corporation minimum. Owners report the income from their federal Schedule K-1 on personal returns.
Does my LLC need a separate Oregon election or form?
Oregon has no separate S election: it recognizes the federal S election, and you file Form OR-20-S.2
What does Oregon tax an S corp or LLC at the entity level?
- An Oregon S corporation pays a $150 minimum excise tax that does not flow through to the owners, plus tax on built-in gains and excess net passive income when those apply.3
- Oregon's Corporate Activity Tax is $250 plus 0.57% of taxable Oregon commercial activity above $1 million, so only larger businesses pay it, whether an LLC, S corp or C corp.6
Is a Oregon LLC taxed as a C corp ever better?
An Oregon C corporation that is an excise tax filer pays 6.6% of Oregon taxable income up to $1 million, and 7.6% of the amount above $1 million plus $66,000. Excise tax filers owe the calculated tax or the minimum tax, whichever is greater. Owners are taxed again on dividends. Add the Corporate Activity Tax if Oregon commercial activity exceeds $1 million.
Run your Oregon numbers
In Oregon the entity-level cost of S status is a flat $150 a year, which is small next to the self-employment tax a profitable owner can save. S pays off sooner than in states with large franchise taxes. Remember the $150 is a real cost with no personal offset, and the Corporate Activity Tax applies to either status above $1 million.
Result
How much would a Oregon LLC owner save as an S corp?
| Taxed as | At $80,000 profit | At $150,000 profit |
|---|---|---|
| Default LLC | $11,304self-employment tax $11,304 | $21,194self-employment tax $21,194 |
| S corp | $9,494payroll tax $7,344 + Oregon S corp tax $150 + $2,000 payroll and prep | $15,920payroll tax $13,770 + Oregon S corp tax $150 + $2,000 payroll and prep |
| C corp | $17,732payroll tax $7,344 + Oregon tax $2,112 + federal $6,276 + $2,000 payroll and prep | $31,498payroll tax $13,770 + Oregon tax $3,960 + federal $11,768 + $2,000 payroll and prep |
Assumes a 60% salary8 and a single filer. Income tax is left out. C corp dividends are taxed again. We could not confirm on an official Oregon source whether a default LLC pays an entity-level tax, so none is shown.
When is the Form 2553 deadline for a Oregon LLC, and what if I miss it?
Late relief: federal steps, deadline guide.
What to do next
How to start one, or have us form it from $123.75.
Registered agent $74.25/yr, annual report.
LLC vs S corp guide, election deadline, Form 2553 filed for $165.
More on Oregon: How to start a Oregon LLC · How to start a Oregon corporation · Oregon LLC cost · Oregon annual report · Annual report late fees by state
File the S-Corp Election for your Oregon LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
What is the Oregon S corporation minimum tax?
$150. An S corporation carrying on or doing business in Oregon must pay the $150 minimum excise tax, and the Department of Revenue says it does not flow through to the shareholders.
What is Oregon's corporate tax rate for a C corporation?
6.6% of Oregon taxable income up to $1 million, and 7.6% of the amount above $1 million plus $66,000, for tax years beginning January 1, 2013 and later, per the Department of Revenue. Excise tax filers owe the greater of this calculated tax or the minimum tax.
Does Oregon tax S corporation income at the entity level?
Generally no: S corporation income is taxable to the shareholders, not the corporation. The entity is taxed on income from built-in gains and excess net passive income if that income is taxed on the federal S corporation return. The $150 minimum is separate.
What is the Oregon Corporate Activity Tax?
A tax on Oregon commercial activity for all entity types. It is $250 plus 0.57% of taxable commercial activity above $1 million, after a 35% subtraction for certain business expenses. Only businesses above $1 million have a payment obligation.
Sources 9 links, checked Nov 6, 2026
- Oregon follows the federal S election: S corporation income is generally taxed to the shareholders, not the corporation. oregon.gov, checked Nov 6, 2026
- Oregon has no separate S election: it recognizes the federal S election, and you file Form OR-20-S. oregon.gov, checked Nov 6, 2026
- An Oregon S corporation pays a $150 minimum excise tax that does not flow through to the owners, plus tax on built-in gains and excess net passive income when those apply. oregon.gov, checked Nov 6, 2026
- Oregon taxes C corporation income at 6.6% up to $1 million and 7.6% on the part above it (plus $66,000), and excise tax filers also owe a minimum tax. oregon.gov, checked Nov 6, 2026
- Oregon taxes S corporation income to the shareholders on their personal returns. oregon.gov, checked Nov 6, 2026
- Oregon's Corporate Activity Tax is $250 plus 0.57% of taxable Oregon commercial activity above $1 million, so only larger businesses pay it, whether an LLC, S corp or C corp. oregon.gov, checked Nov 6, 2026
- IRS: Form 1120 instructions, C corp rate irs.gov, checked Nov 6, 2026
- IRS: S corp reasonable compensation irs.gov, checked Nov 6, 2026
- IRS: Form 2553 instructions irs.gov, checked Nov 6, 2026
Last verified Nov 6, 2026.
This page explains the rules; it is not tax advice. Run your numbers with a CPA or enrolled agent before you elect.
Last verified Nov 6, 2026.