Tax on wages
- employers to withhold
- liability of lender or surety
- annual returns submitted to Department of Revenue
- certain residents to report and pay tax
(1)As used in this section:
(a)“Employer” has the meaning given that term in ORS 316.162 (Definitions for ORS 316.162 to 316.221).
(b)“Resident of this state” has the meaning given that term in ORS 316.027 (“Resident” defined).
(c)“Wages” has the meaning given that term in ORS 316.162 (Definitions for ORS 316.162 to 316.221).
(2)A tax is imposed at the rate of one-tenth of one percent of the wages of an employee who is:
(a)A resident of this state, regardless of where services are performed.
(b)Not a resident of this state, for services performed in this state.
(3)Every employer at the time of the payment of wages shall deduct and withhold from the total amount of the wages paid for services described under subsection (2) of this section an amount equal to the total amount of wages multiplied by the rate of tax imposed under subsection (2) of this section.
(4)An employer shall report and pay the tax imposed under this section to the Department of Revenue at the time and in the manner determined by the department by rule.
(5)For purposes of the tax imposed under this section, an employer is considered a taxpayer.
(6)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 such employer has actual notice or knowledge that such 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, such lender, surety or other person shall be liable to the State of Oregon in a sum equal to the taxes, together with interest, that are not timely paid over to the Department of Revenue. Such 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.
(7)(a) An employer shall submit an annual return pursuant to ORS 316.202 (Reports by employer) to the Department of Revenue. The amounts deducted from the wages during any calendar year in accordance with this section shall be considered to be in payment of the tax imposed under subsection (2) of this section.
(b)The return submitted by the employer shall be accepted by the Department of Revenue as evidence in favor of the employee of the amounts so deducted from the employee’s wages.
(8)Nothing in this section prohibits the Department of Revenue from including the tax imposed under this section in the combined quarterly tax report required under ORS 316.168 (Employer required to file combined quarterly tax report).
(9)An employer that fails to deduct and withhold the tax required under this section:
(a)Is deemed responsible for the payment of the tax obligation in an amount equal to the amount required to be withheld from the employee’s wages and remitted to the Department of Revenue; and
(b)Is subject to a penalty of $250 per employee, up to a maximum penalty of $25,000, if the employer knowingly fails to deduct and withhold the tax.
(10)Residents subject to the tax imposed under this section on wages earned outside this state from an employer not doing business within this state shall report and pay the tax in an amount not to exceed one-tenth of one percent of the wages earned outside this state, and at the time and in the manner, as determined by the Department of Revenue by rule. [2017 c.750 §122a; 2018 c.93 §16]
Notes of Decisions
Amusement device tax is privilege tax, and not property tax subject to limitations of section 11b, Article XI of Oregon Constitution. Alien Enterprises, Inc. v. Dept. of Rev., 12 OTR 126 (1992)