Ballot measures 66 and 67 have passed and taxes will increase retroactively beginning in 2009. These changes could affect 2009 tax returns due on April 15, 2010. We will begin processing personal income tax returns immediately.
 
There are potential impacts on personal income tax and corporate excise tax.  

 
1. New marginal tax rates:
 
The current 9% tax rate will increase for taxable income above certain thresholds.

Tax years 2009, 2010, and 2011

• For taxable income above $125,000 (single filers) and $250,000 (joint filers), the new rate is 10.8%.
• For taxable income above $250,000 (single filers) and $500,000 (joint filers), the new rate is 11%.  

Tax years 2012 and beyond

• For taxable income above $125,000 (single filers) and $250,000 (joint filers), the new rate is 9.9%.  

2. Federal income tax liability subtraction phase-out: Oregon allows a subtraction for your current year's federal income tax liability after credits. The subtraction for 2009 is limited to $5,850. As Measure 66 has passed, the federal income tax liability subtraction will be phased out for taxpayers with adjusted gross income above certain levels (see chart below).  
 

If the taxpayer's adjusted gross income is...	Then the federal tax liability subtraction is limited to...
$125,000 to $129,999 ($250,000 to $259,999 for joint filers)	$4,650
$130,000 to $134,999 ($260,000 to $269,999 for joint filers)	$3,500
$135,000 to $139,999 ($270,000 to $279,999 for joint filers)	$2,300
$140,000 to $144,999 ($280,000 to $289,999 for joint filers)	$1,150
$145,000 or more ($290,000 or more for joint filers)	No subtraction

 
3. Unemployment compensation: For 2009, the federal government exempted the first $2,400 of unemployment compensation from taxable income. Oregon will also exempt the first $2,400 of unemployment compensation from tax. No adjustment to the Oregon return will be necessary as the exemption will "flow through" from the federal return. Form 40S filers: Be sure to use the amount reported on line 19 of federal Form 1040 (or line 13 of federal Form 1040A or line 3 of federal Form 1040EZ).

 
1. New minimum tax: The current $10 corporate minimum excise tax will increase according to the amount of the corporation's Oregon sales (see chart below).
 

Corporations with Oregon sales of...	Will have a minimum tax of...
Less than $500,000	$150
$500,000 to $999,999	$500
$1,000,000 to $1,999,999	$1,000
$2,000,000 to $2,999,999	$1,500
$3,000,000 to $4,999,999	$2,000
$5,000,000 to $6,999,999	$4,000
$7,000,000 to $9,999,999	$7,500
$10,000,000 to $24,999,999	$15,000
$25,000,000 to $49,999,999	$30,000
$50,000,000 to $74,999,999	$50,000
$75,000,000 to $99,999,999	$75,000
$100,000,000 or more	$100,000

 
2. New marginal rates:

• For tax years beginning on or after January 1, 2009, and before January 1, 2011, all corporations' taxable income up to $250,000 will be taxed at the current 6.6% tax rate and any taxable income over $250,000 will have an increased marginal tax rate of 7.9%.
  

• For tax years beginning on or after January 1, 2011, and before January 1, 2013, all corporations' taxable income up to $250,000 will be taxed at the 6.6% tax rate and any taxable income over $250,000 will have a marginal tax rate of 7.6%.

• For tax years beginning on or after January 1, 2013, all corporations' taxable income up to $10,000,000 will be taxed at the 6.6% tax rate and any taxable income over $10,000,000 will have a marginal tax rate of 7.6%.

3. New minimum tax for S-corporations: The current $10 minimum excise tax on S-corporations is increased to $150.
 
4. New minimum tax for partnerships doing business in Oregon: All partnerships doing business in Oregon must file Form 65 and pay a $150 minimum tax.
 
Find out more information on the changes to corporate taxes.
 
Questions?
For specific questions relating to taxes imposed under Measure 67, please e-mail minimumtax.help@state.or.us. We will answer most inquiries within two business days.