New Portland Metro Tax
The Portland Metro district has issued guidance on the implementation of the Metro Supportive Housing Services Income Tax approved by voters in May 2020 and effective for tax years beginning on or after January 1, 2021. The tax is imposed on business profits and individual income after specific thresholds are met. Proceeds from this new tax will fund supportive housing services for people who are experiencing or at risk of experiencing homelessness within the Metro district. The Portland Metro district covers the counties of Clackamas, Washington, and Multnomah, which includes the city of Portland.
Portland Metro businesses with gross receipts exceeding $5 million and individuals and couples with Oregon taxable income greater than $125,000 (individual filers) or $200,000 (married filing jointly) are subject to a 1 percent net income tax. Both residents and nonresidents are subject to this tax if they have earned income attributable to sources within the Portland Metro district.
Beginning April 2021, taxpayers can register with the Portland Revenue Division and begin making quarterly estimated tax payments and remit payroll withholding. The Revenue Division will not assess penalties for tax estimates not paid in 2021 or to employers unable to withhold the tax in 2021. However, estimates and withholding will be mandatory in 2022, and annual returns will be due on the 15th day of the fourth month after the close of the tax year.
Beginning January 1, 2021, employers located within the Metro district are required to offer payroll withholding to their employees once their payroll systems are set up and configured. However, individuals can opt out of the withholding if their tax liability is less than $1,000. Employers located outside the Metro district who employ Metro district residents are not required to withhold or remit withholding tax but may offer it as a convenience to their employees.
For more information, reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.