S corporations doing business in Oregon or receiving income from Oregon sources are required to file Form OR-20-S
, Oregon S Corporation Tax Return
For Oregon tax purposes, S corporation income generally is taxable to the shareholders rather than the corporation. However, S corporations do pay Oregon tax on income from built-in gains or excess net passive income, if such income is subject to tax on the federal corporation return.
An S corporation doing business in Oregon is subject to the minimum tax imposed. The minimum tax isn’t passed through to shareholders.
The income or loss of an S corporation is reported to each shareholder on federal form, Schedule K-1. See Shareholder Information below for more information.
Minimum tax requirements
All S corporations carrying on or doing business in Oregon must pay the minimum excise tax.
Corporations with no business activity in Oregon, even if registered to do business in the state, aren’t required to pay the minimum tax.
Excise tax requirements
Excise tax is a tax for the privilege of doing business in Oregon. It's measured by net income. S corporations doing business in Oregon must file a return to report and pay corporation excise tax.
If the S corporation has an Oregon address, generally the S corporation will file and pay excise tax.
Corporations with no business activity in Oregon, even if registered to do business in the state, aren't subject to the minimum tax and aren't required to file a return. A taxpayer having one or more of the following in this state is doing business in Oregon:
- A stock of goods.
- An office.
- A place of business, other than an office, where corporation affairs are regularly conducted.
- Employees or representatives providing services to customers as the primary business activity (such as accounting or personal services), or services incidental to the sale of tangible or intangible personal property (such as installation, inspection, maintenance, warranty, or repair of a product).
- An economic presence through which the taxpayer regularly takes advantage of Oregon's economy to produce income.
Income tax requirements
S corporations may be subject to the Oregon corporation income tax if they have income from an Oregon source. S corporations that derive income from sources within Oregon, but whose income producing activity doesn’t actually constitute "doing business" must file Form OR-20-S
under the income tax provisions in ORS Chapter 318
Income is from an Oregon source if it is derived from tangible or intangible property located in Oregon or any activity carried on in Oregon, whether intrastate, interstate, or foreign commerce. There is no minimum tax for a corporate income tax filer.
All returns are due on or before the 15th day of the month following the due date of your federal corporation return (April 15 for calendar-year taxpayers). When the 15th falls on a Saturday, Sunday or legal holiday, the due date is the next business day.
When you file your first Oregon S corporation return, include a copy of your federal S corporation election, federal Form 2553. Oregon uses the election made for federal purposes.
If your tax due is $500 or more, you may be required to make estimated tax payments. See Estimated tax payments
for more information.
To amend your Oregon S corporation excise or income tax return, use the form for the tax year you’re amending and check the "Amended" box on the front of the return. See the Form OR-20-S
instructions for more information.
Shareholder tax returns
Shareholders who meet Oregon filing requirements must file an Oregon tax return. Refer to the appropriate Oregon tax returns and instructions, based on what type (individual, corporation, trust, or estate) of taxpayer the shareholder is, for more information.
Resident shareholders are taxed on their pro rata share of S corporation income, losses, and deductions from the federal K-1s. Those amounts are modified by Oregon additions and subtractions.
Nonresident shareholders are taxed on their share of modified income from the federal K-1s, multiplied by the S corporation’s apportionment percentage from Schedule OR-AP.
Each individual shareholder of an S corporation may claim their pro rata share of the corporation’s business tax credits (ORS 314.752 and OAR 150-314-0505
). The shareholder can claim the credit for the tax year in which the S corporation’s tax year ends.
S corporations and other pass-through entities with nonresident owners may have additional filing and payment requirements. See instructions for Form OR-OC
and Form OR-19
for more information.