Oregon is one of only five states with no sales tax at all, which is a real advantage if you sell physical goods. The tradeoff shows up on the income tax side, where rates run higher than most of the country. Here's what it takes to start a business in Oregon in 2026.
1. Which business structure fits you?
Before you file anything, it helps to know what you're actually choosing between.
- Sole proprietorship. No filing required to start, and you and the business are legally the same entity. Simple, but you're personally liable for whatever the business owes.
- Partnership. Two or more people running a business together, with the same liability exposure as a sole proprietorship, just split across partners.
- LLC. The most common structure for small businesses in Oregon. It separates your personal assets from the business's debts and lawsuits.
- Corporation, either S-corp or C-corp. More paperwork and more formality, usually worth it once you're bringing on investors or multiple shareholders.
For a deeper comparison, see our guide on choosing a business structure.
LLCs and corporations register with the Oregon Secretary of State, Corporation Division, the agency that handles business filings statewide. Sole proprietorships and general partnerships don't register there.
2. Register your business
Forming an LLC
You form an LLC in Oregon by filing Articles of Organization with the Secretary of State through the Oregon Business Registry. The filing fee is $100, and online processing is generally the only accepted method outside of a waiver.
Every LLC needs a registered agent with a physical Oregon address, available during business hours. You can act as your own agent, or hire a commercial service.
Oregon doesn't require an operating agreement by law, but it's still worth writing one, particularly for multi-member LLCs, to spell out how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file Articles of Organization. If you're operating under an assumed business name, you'll register it with the Secretary of State's Corporation Division as well, though it's a separate filing from LLC formation.
3. Get an EIN
An Employer Identification Number is free straight from the IRS and takes about 15 minutes online. You'll need one to open a business bank account, hire anyone, or file most business tax forms, even if you're a single-member LLC with no employees.
4. Check licenses and permits
Oregon doesn't issue a single general statewide business license either. What you need depends on your industry and city: professional licensing for regulated fields, and a city business license if you're in Portland, which requires one for most businesses operating within city limits. Our guides on professional licensing by industry and zoning laws for home businesses cover more of this.
5. Understand Oregon taxes
Oregon has no state or local sales tax anywhere, one of only five states with that policy, which simplifies pricing and bookkeeping considerably. The tradeoff is income tax: Oregon's personal income tax is progressive, from 4.75% up to 9.9%, among the higher top rates in the country. If your LLC elects corporate treatment, the corporate excise tax is 6.6% on the first $1 million of taxable income and 7.6% above that.
There's also the Corporate Activity Tax, a gross-receipts tax that only kicks in once your Oregon commercial activity exceeds $1 million a year, at which point you'd owe $250 plus 0.57% of the amount over $1 million. Businesses crossing $750,000 in commercial activity need to register within 30 days, even before they owe anything. Most small LLCs never reach either threshold.
6. Stay compliant
Every Oregon LLC files an Annual Report with the Secretary of State, due on the exact anniversary date of your original filing, not a fixed calendar date or even a fixed month. The fee is $100. There's no set late fee, but the filing window opens 45 days early, and missing the deadline leads to the LLC being inactivated and eventually administratively dissolved.
Oregon business costs at a glance
| Item | Cost |
|---|---|
| Articles of Organization (LLC) | $100 |
| Annual Report (every year, on your anniversary date) | $100 |
| Registered agent service (optional) | $50 to $125/year |
| EIN | Free (IRS) |
| State income tax | 4.75% to 9.9% (progressive) |
| State sales tax | None |
Frequently asked questions
Does Oregon have sales tax?
No, Oregon has no state or local sales tax anywhere, one of only five states with that policy.
How much does it cost to form an LLC in Oregon?
$100 through the Oregon Business Registry, generally online-only.
What's the top personal income tax rate in Oregon?
9.9%, among the higher top rates in the country, on a progressive scale starting at 4.75%.
When does Oregon's Corporate Activity Tax apply?
Only once Oregon commercial activity exceeds $1 million a year, though businesses crossing $750,000 must register within 30 days even before owing anything.
When is Oregon's Annual Report due?
On the exact anniversary date of your original filing, for $100.
Fees and rates above come from the Oregon Secretary of State and Department of Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to an Oregon-licensed attorney or CPA about your specific situation.