Oregon's new statewide transportation tax to support public transportation systems takes effect July 1, 2018. The new law requires employers to withhold and remit 0.1% of all wages paid to Oregon residents. Non-residents who work in Oregon are also subject to the new tax.
New tax forms have been created for reporting subject wages and taxes withheld from employee checks. Employers who file quarterly Form OQ to report their unemployment and withholding taxes will file Form OR-STT-1 each quarter. Agricultural and domestic employers who currently file the annual Form OA for unemployment and withholding taxes will file Form OR-STT-A annually. Transportation taxes withheld will be due with the tax return, similar to unemployment and Worker's Benefit Fund taxes. Oregon's annual Form WR has also been revised to include reconciliation of the transportation tax to the new quarterly and annual STT forms.
Out of state companies who employee Oregon residents performing work outside of Oregon are not required to withhold the transportation tax but may do so as a courtesy, as with Oregon income tax withholding. The new tax will be reported under the same Business Identification Number (BIN) as all other Oregon payroll taxes.
Notification letters went out to all Oregon employers starting in mid-March. Companies enrolled with Revenue Online will have the tax automatically added to their dashboard so they can file the new STT forms electronically. Paper returns are also acceptable.
Payroll On Time, Inc has taken the necessary steps to calculate and withhold the new transit tax from employee checks. We have also added the new tax to our current tax service. We kindly request clients send us a copy of the notification letter they received so we may file returns electronically.