Oregon increases payroll tax to fund transportation projects

An Oregon law intended to fund transportation projects increases payroll tax beginning July 1, 2018. The law imposes a payroll tax, referred to as a transportation project tax, at the rate of 0.1% on the wages of employees who are residents of Oregon or nonresidents performing services in Oregon, in order to fund public transit. If an employer fails to deduct and withhold the tax, the employer will be responsible for payment of the tax obligation. Further, there is a penalty of $250 per employee, up to a maximum penalty of $25,000, if an employer fails to deduct and withhold the tax. Residents of Oregon subject to the tax who earn wages outside of Oregon will be responsible for paying the tax in a manner determined by the Department of Revenue. (H.B. 2017, Laws 2017, effective on the 91st day after adjournment sine die and applicable as noted.)

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