Starting a Business in Oregon: Licenses, Permits & Requirements (2026)

Last updated: February 25, 2026

Oregon stands out for entrepreneurs thanks to one huge advantage: no sales tax. That means no collecting, reporting, or remitting sales tax on goods or services sold in-state. Combined with a straightforward $100 LLC formation fee and a business-friendly regulatory environment, Oregon is an attractive state for small business owners – especially in Portland, Salem, Eugene, Bend, and Medford.

The trade-off is that Oregon relies heavily on income taxes, with a top rate of 9.9% and a Corporate Activity Tax on businesses with over $1 million in commercial activity. This guide walks you through every step to legally start a business in Oregon, from entity formation to licensing, taxes, and insurance. We have compiled requirements from the Oregon Secretary of State, Department of Revenue, Employment Department, and other state agencies so you don’t have to piece it together yourself.

How to Start a Business in Oregon (Step by Step)

Step 1: Choose Your Business Structure

Your business structure determines your personal liability, tax treatment, and paperwork requirements. The most common options in Oregon:

• Sole Proprietorship – Simplest to start, but you are personally liable for all debts. No state formation filing required (just register an Assumed Business Name if using a DBA).
• LLC (Limited Liability Company) – Most popular choice. Protects personal assets, flexible tax treatment, and Oregon’s $100 filing fee is straightforward.
• Corporation (S-Corp or C-Corp) – More formal structure with shareholders, directors, and officers. Better for businesses seeking investors or planning to go public.
• Partnership – For businesses with two or more owners. Can be a general partnership (GP) or limited partnership (LP).

For most small businesses, an LLC is the right choice. It gives you liability protection without the complexity of a corporation, and Oregon makes formation simple through its online registry.

Step 2: Register Your Business with the State

LLC Formation via Oregon Secretary of State

Oregon business entities are registered through the Oregon Secretary of State, Corporation Division at sos.oregon.gov. You can file online or by mail.

Item	Cost
Articles of Organization filing fee	$100.00
Total to form an Oregon LLC	$100.00
Annual Report	$100.00 per year
Assumed Business Name (DBA)	$50.00 (valid 2 years)
ABN Renewal	$50.00 every 2 years
Name Reservation (optional)	$100.00
Late Annual Report penalty	$100.00 + risk of administrative dissolution after 45 days

How to file:

1. Go to the Oregon Business Registry
2. Choose a business name that includes “LLC,” “L.L.C.,” or “Limited Liability Company” – it must be distinguishable from existing entity names on file
3. Designate a registered agent with a physical street address in Oregon (no P.O. boxes). The agent must be available during normal business hours
4. Pay the $100 filing fee – online filings are typically processed within 2-3 business days
5. File your Annual Report each year by the anniversary of your formation date. You have a 45-day grace period before the state marks your entity inactive

Assumed Business Name (DBA): If you plan to operate under a name different from your LLC’s legal name, register an Assumed Business Name with the Secretary of State for $50. ABN registrations are valid for 2 years and must be renewed for $50. An LLC operating under its own legal name does not need an ABN.

Federal EIN (Employer Identification Number)

After forming your LLC, apply for a free EIN from the IRS at IRS.gov. You will receive it immediately when applying online. You need an EIN to open a business bank account, hire employees, and file taxes.

Important: Register your LLC with the state before applying for an EIN, since the IRS application requires your legal entity name.

Step 3: Get Required Licenses & Permits

No Statewide General Business License

Oregon does not have a single statewide general business license. Instead, your licensing requirements depend on your industry and location:

• No sales tax license needed: Oregon has no general sales tax, so there is no sales tax license to obtain (unlike most other states).
• Local business licenses: Many Oregon cities require a local business license or tax registration. Portland, Salem, Eugene, Bend, and other cities have their own requirements. Check with your city’s revenue or licensing office.
• Professional/occupational licenses: Some industries require state-level licenses. Use the Oregon Business Xpress License Directory to find requirements for your industry.

Portland Business License Tax

If you operate within Portland city limits, you must register for the Portland Business License Tax. The minimum tax is $100, scaled by gross income. Portland also imposes the Metro Supportive Housing Services (SHS) tax and Multnomah County Preschool for All (PFA) tax on higher-income earners. These are important cost considerations for Portland-area businesses.

Step 4: Register for State Taxes

Oregon Has No Sales Tax

Oregon is one of only five states with no general sales or use tax. This has been the case for over 100 years. You do not need to collect sales tax on goods or services sold within Oregon. However, if you sell into other states, you may have sales tax nexus obligations in those states.

Oregon Income Tax

Oregon uses a progressive income tax with four brackets. Because there is no sales tax, Oregon relies heavily on income tax revenue – and rates are among the highest in the country:

Taxable Income (Single Filer)	Rate
$0 – $4,300	4.75%
$4,300 – $10,750	6.75%
$10,750 – $125,000	8.75%
Over $125,000	9.90%

• Pass-through entities (LLCs, S-Corps, partnerships) – income flows through to owners’ personal returns at these rates
• File and pay through the Oregon Department of Revenue

Corporate Activity Tax (CAT)

Oregon imposes a Corporate Activity Tax on businesses with significant commercial activity in the state:

• Registration threshold: Must register within 30 days of exceeding $750,000 in Oregon commercial activity
• Tax rate: $250 + 0.57% of taxable commercial activity over $1 million
• Subtraction: 35% of the greater of cost of goods sold or labor costs
• Applies to: All entity types (LLCs, corporations, sole proprietors, partnerships)
• Estimated payments: Required quarterly if CAT liability expected to exceed $5,000

Most small businesses starting out will fall below the $1 million threshold, but it is important to be aware of the CAT as your revenue grows.

Oregon Employer Taxes (If Hiring Employees)

If you plan to hire employees, you must register with the Oregon Employment Department and withhold/pay several taxes:

Unemployment Insurance (UI)

• New employer rate (2026): 2.4% (Tax Schedule 3)
• Rate range: 0.9% to 5.4% (experience-rated)
• Taxable wage base (2026): First $56,700 per employee
• Registration: Through Frances Online (Oregon Employment Department)

Paid Leave Oregon

• Total contribution rate (2026): 1.0% of gross wages
• Employee share: 60% (0.6% of wages)
• Employer share (25+ employees): 40% (0.4% of wages)
• Small employers (fewer than 25): Must withhold and remit the employee’s 60% share but are exempt from the employer’s 40% portion
• Wage cap: $184,500 (Social Security wage base)

Statewide Transit Tax

• Rate: 0.1% of gross wages (employee-paid, employer withholds)
• Applies to: All Oregon employees statewide

TriMet / Lane Transit District Payroll Tax (Location-Dependent)

• TriMet (Portland metro): 0.8237% of gross payroll – paid by employer
• Lane Transit District (Eugene/Springfield): 0.80% of gross payroll – paid by employer
• These apply only if you have employees working within the respective transit district boundaries

New Hire Reporting

• Report all new hires and rehires within 20 days of the hire date
• Independent contractors must also be reported within 20 days
• Report through the Oregon Employer Services Portal

Step 5: Get Business Insurance

Insurance requirements depend on your business type and whether you have employees:

Workers’ Compensation

Oregon requires workers’ compensation insurance for all employers with one or more employees. Oregon offers both a state fund and private options:

Situation	Requirement
Any employer with 1+ employees	Coverage required – no minimum threshold
Part-time employees	Coverage required
Sole proprietors / LLC members with no employees	Optional
Independent contractors	Exempt if truly independent

Purchase workers’ comp from SAIF Corporation (Oregon’s state-run, nonprofit insurer with ~54% market share), private insurers, or apply for self-insurance. All employers must also pay the Workers’ Benefit Fund (WBF) assessment of 1.8 cents per hour worked (split 50/50 between employer and employee) for 2026.

Penalties for non-compliance:

• $1,000 or 2x the premium owed (whichever is greater)
• $250 per day for continued noncompliance
• Personal liability for the full cost of any workplace injury claims

General Liability Insurance

While not always legally mandated, general liability insurance is practically essential for most businesses. It protects against claims of bodily injury, property damage, and advertising injury. Many clients, landlords, and government contracts require proof of coverage.

Oregon Business Guides by Industry

Every industry has different licensing, permit, and insurance requirements. Choose your business type for a detailed breakdown of everything you need in Oregon:

• How to Start a Cleaning Service in Oregon – Business registration, BOLI property services requirements, insurance, and cost breakdown
• How to Start a Food Truck in Oregon – OHA mobile food unit license, food handler card, local health permits, and fire safety rules
• How to Start a Daycare in Oregon – DELC licensing, Central Background Registry, training requirements, and facility rules
• How to Start an HVAC Business in Oregon – CCB contractor license, bonding, EPA 608 certification, and insurance requirements
• How to Start a Hair Salon in Oregon – OHA Board of Cosmetology license, facility registration, and sanitation rules
• How to Start a Landscaping Business in Oregon – LCB licensing, ODA pesticide certification, bonding, and continuing education
• How to Start a Private Investigation Business in Oregon – DPSST licensing, experience requirements, bonding, and costs

Oregon Business Resources & Official Links

Resource	What It’s For
Oregon Secretary of State – Corporation Division	Business entity registration, name searches, annual reports, assumed business names
Oregon Business Registry	Online business registration portal
Oregon Department of Revenue	Income tax, Corporate Activity Tax, withholding, transit taxes
Oregon Employment Department	Unemployment insurance, employer registration, Frances Online
Paid Leave Oregon	Paid family and medical leave program – employer contributions and compliance
Workers’ Compensation Division	Workers’ comp requirements, compliance, and employer resources
SAIF Corporation	Oregon’s state-run workers’ compensation insurer
Oregon Business Xpress License Directory	Find required licenses and permits by industry
Bureau of Labor and Industries (BOLI)	Wage and hour laws, employment standards, workplace protections
IRS EIN Application	Free federal tax ID number

Frequently Asked Questions

How much does it cost to start an LLC in Oregon?

The filing fee for Articles of Organization with the Oregon Secretary of State is $100. You must also file an annual report for $100 per year. Optional costs include an Assumed Business Name registration ($50, valid 2 years) and registered agent service if you use a third party.

Does Oregon have a sales tax?

No. Oregon is one of only five states with no general sales or use tax. This has been the case for over 100 years. You do not need to collect sales tax on goods or services sold within Oregon. However, if you sell into other states, you may have sales tax nexus obligations in those states.

What is Oregon’s income tax rate?

Oregon uses a progressive income tax with four brackets. The top rate is 9.9% on taxable income over $125,000 (single filer). Most small business income falls in the 8.75% bracket ($10,750 to $125,000). Because Oregon has no sales tax, it relies heavily on income tax revenue.

What is the Oregon Corporate Activity Tax?

The CAT is a gross receipts tax of $250 plus 0.57% of taxable commercial activity over $1 million. Businesses must register within 30 days of exceeding $750,000 in Oregon commercial activity. You can subtract 35% of the greater of your cost of goods sold or labor costs. Most new small businesses will fall below the threshold.

Does Oregon require annual reports for LLCs?

Yes. Oregon requires LLCs to file an annual report each year by the anniversary of the formation date. The filing fee is $100. If you miss the deadline, you have a 45-day grace period before the state marks your entity inactive. Reinstatement requires a $100 penalty plus any missed annual report fees.

Do I need workers’ compensation insurance in Oregon?

Yes, if you have any employees at all. Oregon requires coverage from the first employee. You can purchase from SAIF Corporation (Oregon’s state-run insurer), private insurance companies, or apply for self-insurance. Sole proprietors and LLC members without employees may opt in voluntarily. Penalties for non-compliance include $1,000 or 2x the premium owed plus $250 per day.