Personal Income Tax

ORS 316.167
Withholding of tax required

  • elective provisions for agricultural employees
  • liability of supplier of funds to employer for taxes


Every employer at the time of the payment of wages to any employee shall deduct and retain from the wages an amount determined by the Department of Revenue under ORS 316.172 (Department to provide deduction and withholding information and determine amount, form and manner of withholding by employers). However, in the case of wages paid to an employee whose services to the employer consist solely of labor in connection with the planting, cultivating or harvesting of seasonal agricultural crops, the employer may elect to withhold two percent of the total wages paid without regard to any exemption from withholding requirements.


If a lender, surety or other person who supplies funds to or for the account of an employer for the purpose of paying wages of the employees of the employer has actual notice or knowledge that the employer does not intend to or will not be able to make timely payment or deposit of the tax required to be deducted and withheld, the lender, surety or other person shall be liable to the State of Oregon in a sum equal to the taxes together with interest which are not timely paid over to the department. This liability shall be limited to the principal amount supplied by the lender, surety or other person, and any amounts so paid to the department shall be credited against the liability of the employer.


With the approval of the Oregon Department of Administrative Services, the department may enter into contracts with banking institutions including but not limited to Federal Reserve Banks, incorporated banks, trust companies, domestic building and loan associations, savings and loan associations or credit unions authorizing them to receive as financial agents of the department any tax required to be withheld and paid to the department. [1969 c.493 §25; 1975 c.394 §1; 1977 c.604 §2; 1982 s.s.1 c.1 §1; 2019 c.134 §2]

Notes of Decisions

Relinquishment of authority to sign checks does not excuse officer from liability for payment. Robblee v. Dept. of Revenue, 13 OTR 505 (1996), aff’d 325 Or 515, 942 P2d 765 (1997)

Withholding tax is not subject to ORS 305.419 requirement that tax be paid prior to filing of appeal. Zamani v. Dept. of Revenue, 19 OTR 318 (2007)


Last accessed
Mar. 11, 2023