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Nonprofit organizations must register with and be certified by the Oregon Secretary of State.
Corporate Income and Excise Tax
If you are an exempt organization under Internal Revenue Code (IRC) Sections 501(c) through (f), 501(j), 501(n), 521, or 529, you are exempt from Oregon Corporation taxes [ORS 317.080 (1)–(8)]. Apply to the Internal Revenue Service for exempt status. You don’t have to apply to the Oregon Department of Revenue. Here are two exceptions:
- Nonprofit homes for the elderly. ORS 317.080(9)
- People’s utility districts established under Oregon Revised Statutes, chapter 261. ORS 317.080(10)
If you are exempt from Oregon tax and do not have unrelated business taxable income, an Oregon tax return is not required. Unrelated business taxable income is defined in IRC Section 512. If you do have unrelated business taxable income, file a Form 20 (Oregon Corporation Excise Tax Return). Attach a copy of your federal Form 990T. Some religious organizations that qualify under IRC Section 501(d) may file as partnerships.
If you are exempt from federal tax but not exempt for Oregon, you must file a Form 20. Attach a copy of your federal Form 990T.
Homeowner’s associations may elect to be treated as tax-exempt organizations (ORS 317.067). The association must make the election no later than the time prescribed by law for filing the return. A copy of the Form 1120-H filed with the Internal Revenue Service will constitute this election when filed with the Department of Revenue. Tax-exempt status will only exempt the association from tax on the exempt function income. If the association has any taxable income as defined by federal law, report it on Oregon Form 20.
Withholding
If you have Oregon employees, you are subject to payroll taxes and need to register your organization with the Secretary of State's Corporation Division.
Corporations classified under IRC Section 501(c)(3) may be exempt from TriMet and Lane Transit taxes. You must send a copy of your federal determination letter with your request for exempt status to: Business Division, Oregon Department of Revenue, PO Box 14800, Salem, OR 97309-0920.
Sales/Use Taxes
Oregon doesn’t have sales or use taxes and doesn’t issue exemption certificates. If you need an exemption from paying sales tax in another state, contact the Secretary of State's Corporation Division.
Property Tax
An organization exempt from federal or state excise/income taxes may not be exempt from Oregon property taxes. Check with your local assessor to see if you qualify for exemptions, and if filing is required.
Proxy Tax
A “proxy tax” is imposed on otherwise exempt organizations similar to that imposed under IRC 6033(e). Under federal law, an exempt organization is required to report to its members the portion of their dues or other payments spent on lobbying activities. If the exempt organization does not comply, a federal return must be filed reporting and paying tax on those expenditures. In such cases, lobbying expenses are allocated or apportioned to Oregon and subject to Oregon tax at the corporate tax rate. ORS 314.256
The Oregon Department of Justice regulates charitable activities in Oregon. You may also need to register with them.
E-mail: corp.help.dor@state.or.us
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