On May 19, voters will decide whether to increase the Oregon statewide transit tax. Legislation recently signed by the governor moves up the vote from November 3,
2026 [S.B. 1599, L. 2026].
Previously, the Oregon statewide transit tax increase was set to take effect January 1, 2026. It was put on hold after petitioners began collecting signatures for Initiative Petition 302. The Oregon Secretary of State placed the initiative on the ballot for the November election. The state legislature then passed legislation moving that initiative and others to the May election.
Tax Rate
Currently, the tax rate is 0.1%. If the initiative passes, the tax would be raised to 0.2%.
What Is the Statewide Transit Tax?
Employers with nonresident employees performing work within Oregon or with resident employees, regardless of where work is performed (so long as the employer has nexus with Oregon), must withhold the tax from employee wages. The tax is assessed on the wages of (1) nonresident employees for work performed within Oregon and (2) resident wages, regardless of where work is performed.
The Oregon statewide transit tax is not related to the Lane or TriMet transit payroll taxes administered by the Oregon Department of Revenue (DOR). It is also not related to the local transit taxes administered by the localities themselves (Canby, Sandy, South Clackamas, and Wilsonville).
Local transit payroll taxes are imposed on the employer and based on the amount of payroll. The Oregon statewide transit tax is imposed on the wages of each employee, but the employer is responsible for withholding, reporting, and remitting the tax to the DOR.
Local Payroll Tax Help
For more information about local payroll taxes, register for the State and Local Certificate Program, June 1-3. Attendees who complete this certificate program also earn a digital badge.
Interested in more state and local payroll coverage? PayrollOrg’s PayState Update eNewsletter is perfect for you.
Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for PayrollOrg.
