New Withholding Requirement in Oregon

- Legislation enacted in Oregon in 2017 has imposed a new payroll tax to fund public transportation in the state.  The tax is on those working in Oregon, but employers are responsible for withholding and paying over the tax, at 0.1 percent of the gross wages paid to each employee. Self-employment income is not included in the tax base, so independent contractors’ earnings are exempt.  Oregon residents employed by out-of-state employers are subject to the tax and must pay it directly if their employers do not withhold it on their behalf.  Although nonresidents of Oregon who receive wages reflecting services performed in Oregon are subject to the tax, truck drivers and other interstate transportation workers are exempt under federal law unless they are Oregon residents.  The withholding requirement went into effect for pay periods ending after July 1, 2018.  

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