TriMet and Lane Transit Self-employment Taxes
The Oregon Department of Revenue administers and collects transit self-employment taxes on behalf of the TriMet Transportation District (TriMet) and Lane Transit District (LTD). Taxpayers with self-employment earnings from doing business or providing services within the transit districts are subject to transit self-employment tax.
If you conduct business both inside and outside the district, use an apportionment formula that is calculated by completing Schedule OR-TSE-AP and including it with your transit self-employment tax return. Receipts from the sale of services are sourced to a transit district when they're delivered inside the district (market-based sourcing). See Oregon Administrative Rule (OAR) 150-314-0435 for more information.
Filing requirements
Individuals
If you have net self-employment earnings greater than $400 from business or service activities in or delivered to the TriMet or LTD districts, you must pay transit self-employment tax. This includes independent contractors and subcontractors, truck drivers, consultants, writers, internet sales, farmers, doctors, dentists, and real estate salespeople. This list isn't all-inclusive.
Partnerships
Individuals who are members of a partnership are subject to this tax. The partnership may elect to file and pay the tax for the individual partners. The partnership must use net earnings from self-employment as reported on federal Form 1065 to figure the tax. Do not make Oregon modifications.
Due date
Individuals
Transit self-employment returns are generally due the same day as federal and Oregon individual income tax returns. For most individual taxpayers, this is April 15. For individuals filing a fiscal year return, the return is due on the 15th day of the fourth month after the end of the fiscal year. When the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.
Partnerships
When a partnership tax year ends within a calendar year, the partnership files as if it's on a calendar-year basis, with the return due the following April 15.
Extensions
If you received an extension to file your federal or Oregon individual income tax return, it will also extend your Transit Self-Employment Tax return. When you file your return, check the “An extension has been filed" box on page 1 and do not include a copy of the extension. Keep it with your records.
An extension doesn't mean more time to pay. If you have an extension, you must make your payment by the original due date of the return to avoid a penalty and interest charge.
Exempt self-employment income
The following income is exempt from transit self-employment taxes:
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Ministers: Only compensation received for religious services is exempt. Compensation received for independent contract services, such as weddings or funerals, is taxable.
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Insurance agents: Only Insurance-related income is exempt. Self-employment activities, such as consulting or investment advice, are taxable (ORS 731.840).
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Rental properties: Aren't subject to tax unless you're a real estate dealer and rental income is part of your business [IRC 1402(a)(1)].
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Truckers: Income is exempt if you're only traveling through the district (no pick-ups or deliveries).
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C and S corporations: Income and distributions are exempt from transit self-employment taxes. However, corporations may owe transit payroll tax. For more information, call 503-945-8091.
Frequently asked questions
The maximum exclusion for each individual’s self-employment earnings is $400. See the specific form instructions for more information.
Net self-employment earnings are on federal Schedule SE, line 3. Enter this amount on line 1 of the transit self-employment tax return. The net self-employment earnings on federal Schedule SE may include earnings reported on: federal Schedule C or C-EZ; federal Schedule F; or federal Schedule K-1 from a partnership return (federal Form 1065).
No, only report self-employment activities with net earnings more than $400.
No, each taxpayer with self-employment earnings must file a separate transit self-employment return, even if you filed joint state and federal returns.
File one return for each individual taxpayer. If an individual has separate business activities, include a schedule for each separate business to the return.
Yes, if you have transit district self-employment earnings from both, you may net the gain of one business against the loss of a separate business. Include a schedule showing the amount from each separate business.
No, you're not required to make estimated tax payments.
If you send a payment separate from your return, make sure to include the correct payment voucher with your check or money order.
No, we can't use an income tax refund to pay your transit self-employment tax.
If you filed an extension on your federal or Oregon individual income tax return, it allows you to extend your time to file your transit self-employment tax return. Check the “Extension Filed” box on your transit return. Don’t include your extension with your return. Retain it with your records.
More time to file doesn’t mean more time to pay. If you have an extension, you still must make your payment by the original due date of the return to avoid a penalty and interest charge.
Yes, complete a transit tax return for the year being amended and show the correct information. Check the box to indicate it’s an amended return. Refunds will only be issued if the amended return is filed within three years of the original return due date or filed date, whichever is later.
If changes are made that affect your transit self-employment earnings, file an amended return with us to report and pay any additional tax due. If the change reduces your transit tax, you have two years from the date of the audit report to amend and claim a refund.
Not all nonprofit organizations are exempt from these transit taxes. Only the organizations with 501(c)3 status are exempt. Nonprofit organizations need to send us a copy of the IRS determination. Hospitals are not exempt. The statewide transit tax is not included in this exemption.