# Oregon Contractor Taxes and Licensing Guide

No, Oregon contractors don't charge sales tax. The state has no general sales or use tax, so contractors don't charge sales tax on labor or materials. The state taxes income instead. Larger businesses may owe the corporate activity tax on Oregon receipts over $1 million, and Portland-area shops can owe local business income taxes.

## Key takeaways

- Oregon DOR says the state "doesn't have a general sales or use/transaction tax," so there's no sales tax on labor, materials or fixtures.
- Personal income tax rates run from 4.75% to 9.9%. Estimated payments are required if you expect to owe $1,000 or more after credits and withholding.
- The corporate activity tax (CAT) is $250 plus 0.57% of taxable Oregon commercial activity over $1 million, with registration at $750,000.
- Contractors license with the CCB by endorsement. A residential general contractor needs a $25,000 bond and $500,000 per occurrence liability coverage.
- Workers' comp is required if you have employees. You can buy it from SAIF, a private insurer or the assigned risk pool, or self-insure.

## Does Oregon tax contractor labor or materials?

Neither. The Oregon Department of Revenue (DOR) puts it plainly: "Oregon doesn't have a general sales or use/transaction tax." There's no seller's permit to apply for, no sales tax line on your invoice and no tax on the lumber you pick up in Salem. That makes Oregon one of the simplest states for job pricing, as long as all the work stays inside the state.

The catch is that the state collects in other ways. You'll pay income tax on profit, bigger shops may owe the CAT on gross receipts, and the Portland area adds its own business taxes. If you cross the Columbia for work, [Washington](https://www.brix.so/taxes/washington) charges sales tax on the full contract price for most construction, labor included. Our [labor vs. materials guide](https://www.brix.so/learn/sales-tax-on-labor-vs-materials) explains how other states split the job.

> **Example (illustrative numbers): the same deck in two places**
>
> Say you build a $15,000 deck in Beaverton: $6,000 in materials and $9,000 in labor. Oregon adds no sales tax to the customer's bill, and you pay none on the materials at an Oregon yard. The $15,000 is simply income for your books.
>
> Take the identical job to Vancouver, Washington, and the whole $15,000 is subject to Washington's sales tax at the job site's rate. Price cross-river work with that in mind.

## What about materials bought out of state, and is there use tax?

Oregon has no general use tax either, so there's no Oregon return for tools ordered online. DOR does list a few exceptions that aren't general taxes, such as a vehicle use tax on new vehicles bought outside the state. Two points matter when you shop across the border:

- **Sales tax paid elsewhere stays paid.** DOR says "Oregon law doesn't allow you to reduce your Oregon taxes because you paid sales tax in another state."
- **Resale certificate.** DOR offers the Oregon Business Registry Resale Certificate for Oregon buyers who buy goods out of state to resell in Oregon. The out-of-state seller "may accept" it but isn't required to, and DOR notes some states, including Washington, may want their own form.
- **Equipment rentals.** Oregon's heavy equipment rental tax is 2% of the rental price when you rent from a qualified heavy equipment rental provider, which charges it to you. Delivery, damage waivers and operator services aren't part of the taxed price.

If you work in states that do have sales tax, read [use tax for contractors](https://www.brix.so/learn/use-tax-for-contractors) before you buy materials for those jobs.

## Which Oregon licenses do contractors need?

The Construction Contractors Board (CCB) says "Oregon law requires anyone who works for compensation in any construction activity involving improvements to real property to be licensed." To get licensed, you complete at least 16 hours of pre-license training and pass the Oregon exam. You pick endorsements for residential or commercial work, and each sets its own bond and insurance. Electrical and plumbing need a Building Codes Division (BCD) license on top. The [contractor license guide](https://www.brix.so/learn/contractor-license) compares this with other states.

**Oregon contractor credentials by trade (checked 2026-10-19)**

| Trade | Agency | Credential | Link |
| --- | --- | --- | --- |
| Residential general contractor | CCB | Residential General Contractor endorsement: $25,000 bond and $500,000 per occurrence liability insurance | [CCB license](https://www.oregon.gov/ccb/pages/ccb%20license.aspx) |
| Residential specialty or limited | CCB | Residential Specialty: $20,000 bond, $300,000 per occurrence. Residential Limited: $15,000 bond, $100,000 per occurrence. | [CCB license](https://www.oregon.gov/ccb/pages/ccb%20license.aspx) |
| Commercial general contractor | CCB | Level 1: $80,000 bond, $2,000,000 aggregate. Level 2: $25,000 bond, $1,000,000 aggregate. | [CCB license](https://www.oregon.gov/ccb/pages/ccb%20license.aspx) |
| Electrical | CCB and BCD | CCB license plus a BCD electrical contractor license. Workers hold BCD individual licenses such as the General Journeyman Electrician license. | [BCD licensed work](https://www.oregon.gov/bcd/lbdd/pages/licensed-work.aspx) |
| Plumbing | CCB and BCD | CCB license plus the appropriate BCD plumbing contractor license. The person doing the work needs an individual plumbing license. | [BCD licensed work](https://www.oregon.gov/bcd/lbdd/pages/licensed-work.aspx) |
| HVAC and appliance work | CCB and BCD | CCB license. For electric water heater, dishwasher or disposal installs under plumbing minor labels, BCD requires a Plumbing Business license plus a Limited Maintenance Specialty Contractor (LMS) or LMS HVAC/R (LHR) license. | [BCD plumbing minor labels](https://www.oregon.gov/bcd/minlab/Pages/pl-scope.aspx) |

_Commercial specialty endorsements and home services endorsements carry other amounts listed on the CCB page. For other HVAC or limited electrical work, check with BCD for the license your scope needs._

## How does Oregon tax a contractor's income?

Income is where Oregon makes up for the missing sales tax. The Secretary of State's Blue Book lists personal income tax rates from 4.75% to 9.9% of taxable income. Sole proprietors and most LLC owners report business profit on their personal return. DOR says "you must make estimated tax payments if you expect your tax after credits and withholding will be $1,000 or more." Use the [quarterly estimated tax calculator](https://www.brix.so/tools/quarterly-estimated-tax-calculator) for the federal side, then check DOR for the state due dates.

The corporate activity tax (CAT) is a separate tax on gross receipts, and it isn't only for corporations. DOR's CAT rules, applicable to tax years beginning on or after January 1, 2020:

- **Register** within 30 days of reaching $750,000 in Oregon commercial activity for the year.
- **File and pay** once taxable Oregon commercial activity tops $1 million. The tax is "$250 plus 0.57 percent of taxable Oregon commercial activity of more than $1 million."
- **Subtraction.** You can subtract 35% of the greater of cost inputs or labor costs from Oregon commercial activity.
- **Estimates.** If you expect $5,000 or more of CAT liability, DOR requires estimated payments.

## Is workers' comp required for Oregon contractors?

If you have employees, yes. The Department of Consumer and Business Services (DCBS) says "Oregon law requires that every employer provide workers' compensation coverage for its employees." Unlike [Washington](https://www.brix.so/taxes/washington), Oregon lets you choose: a private insurer, SAIF Corporation (which calls itself "Oregon's state-chartered, not-for-profit workers' compensation carrier"), the assigned risk pool, or self-insurance.

The CCB adds its own rules. Commercial contractors must have workers' comp. Residential contractors with no employees can license as exempt, and the CCB says some family-owned businesses are exempt even with several family members working. Leased workers are usually covered through the leasing company. See [workers' compensation](https://www.brix.so/learn/workers-compensation) for how premiums are figured.

## Portland-area taxes and other local items

- **City of Portland Business License Tax: 2.6%.** The Revenue Division lists a gross receipts exemption of $75,000 for tax years beginning in 2026 and $100,000 from 2027.
- **Multnomah County Business Income Tax: 2%.** Exempt if gross receipts from all business are less than $100,000.
- **Metro SHS Business Income Tax: 1%,** for businesses in Metro's area with gross receipts over $5 million. Sole proprietors owe the Metro SHS personal income tax instead.
- **Registration.** Businesses operating in Portland or Multnomah County must register for a Revenue Division tax account within 60 days.
- **Liens and neighbors.** Know your [mechanics lien](https://www.brix.so/learn/mechanics-lien) deadlines, and read the [California](https://www.brix.so/taxes/california) and [Idaho](https://www.brix.so/taxes/idaho) pages before bidding there.

> **Not tax advice**
>
> This page sums up Oregon agency guidance as of the date shown and isn't tax or legal advice. CAT and local taxes turn on details of your receipts and entity. Confirm with DOR, the CCB or the Portland Revenue Division, or bring in a CPA who knows Oregon contractors.

BRIX keeps job costs and expenses categorized, tracks 1099 subcontractors and flags quarterly estimate dates, so your gross receipts and profit are easy to hand your CPA. It syncs invoices and payments with QuickBooks. BRIX doesn't file taxes or give tax advice.

- [Bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes): Keeps expenses categorized, tracks 1099 subcontractors and sales tax, and reminds you of quarterly estimated tax dates. BRIX does not file taxes or give tax advice.
- [QuickBooks sync](https://www.brix.so/integrations/quickbooks): Syncs customers, invoices and payments with QuickBooks so the books match the jobs.

## Frequently asked questions

### Do Oregon contractors charge sales tax?

No. Oregon DOR says the state doesn't have a general sales or use/transaction tax. You don't add sales tax to labor, materials or fixtures on an Oregon job. Work in a neighboring state follows that state's rules.

### Can I get a refund for Washington sales tax I paid on materials?

Not on your Oregon return. DOR says Oregon law doesn't allow you to reduce your Oregon taxes because you paid sales tax in another state. Ask the other state's revenue department whether any exemption applies to your purchase.

### What is the Oregon CAT and does a small contractor owe it?

The corporate activity tax applies to taxable Oregon commercial activity over $1 million, at $250 plus 0.57% of the amount above $1 million. You register within 30 days of reaching $750,000. Below $1 million there's no CAT return, and below $750,000 there's nothing to register.

### How much is the CCB bond for a residential general contractor?

The CCB lists a $25,000 bond and $500,000 per occurrence liability insurance for the Residential General Contractor endorsement. Specialty and limited endorsements need less, and commercial endorsements need more. You also need 16 hours of pre-license training and a passing exam score.

### Is a CCB license enough to do electrical or plumbing work?

No. BCD says electrical and plumbing contractors need a CCB license and the appropriate BCD electrical or plumbing contractor license. The people doing the work also need individual BCD licenses.

### Do I have to buy workers' comp from SAIF?

No. DCBS lists private insurers, SAIF, the assigned risk pool and self-insurance as options. SAIF describes itself as Oregon's state-chartered, not-for-profit carrier, but it isn't the only choice.

### Do Portland contractors pay extra business taxes?

Often. The City of Portland Business License Tax is 2.6% and the Multnomah County Business Income Tax is 2%, each with a gross receipts exemption. Businesses over $5 million in Metro's area may also owe the 1% Metro SHS tax.

## Related

- [Do Contractors Charge Sales Tax on Labor or Materials?](https://www.brix.so/learn/sales-tax-on-labor-vs-materials)
- [What Is Use Tax for Contractors?](https://www.brix.so/learn/use-tax-for-contractors)
- [What Is a Contractor License?](https://www.brix.so/learn/contractor-license)
- [What Is Workers' Compensation Insurance?](https://www.brix.so/learn/workers-compensation)
- [What Is a Mechanic's Lien?](https://www.brix.so/learn/mechanics-lien)
- [Quarterly Estimated Tax Calculator for Self-Employed Contractors (2026)](https://www.brix.so/tools/quarterly-estimated-tax-calculator)
- [Washington Contractor Taxes and Licensing Guide](https://www.brix.so/taxes/washington)
- [California Contractor Taxes and Licensing Guide](https://www.brix.so/taxes/california)
- [Idaho Contractor Taxes and Licensing Guide](https://www.brix.so/taxes/idaho)
- [Self-Employment Tax Calculator (2026)](https://www.brix.so/tools/self-employment-tax-calculator)

## Sources

- [Oregon DOR, Sales tax in Oregon (no general sales or use tax; resale certificate; tax paid in other states)](https://www.oregon.gov/dor/programs/businesses/pages/sales-tax.aspx) (checked 2026-10-19)
- [Oregon DOR, Corporate Activity Tax](https://www.oregon.gov/dor/programs/businesses/Pages/corporate-activity-tax.aspx) (checked 2026-10-19)
- [Oregon DOR, Heavy Equipment Rental Tax (2%)](https://www.oregon.gov/dor/programs/businesses/pages/hert.aspx) (checked 2026-10-19)
- [Oregon DOR, Personal income tax (estimated payments at $1,000 or more)](https://www.oregon.gov/dor/programs/individuals/pages/pit.aspx) (checked 2026-10-19)
- [Oregon Secretary of State, Blue Book: Oregon's economy, revenue and taxes (income tax rates 4.75% to 9.9%)](https://sos.oregon.gov/blue-book/explore/Pages/economy-revenue.aspx) (checked 2026-10-19)
- [Oregon CCB, CCB license (who needs a license, training, bond, insurance, workers' comp)](https://www.oregon.gov/ccb/pages/ccb%20license.aspx) (checked 2026-10-19)
- [Oregon BCD, Getting licensed work (CCB plus BCD electrical or plumbing contractor license)](https://www.oregon.gov/bcd/lbdd/pages/licensed-work.aspx) (checked 2026-10-19)
- [Oregon BCD, Plumbing minor labels: scope and license requirements](https://www.oregon.gov/bcd/minlab/Pages/pl-scope.aspx) (checked 2026-10-19)
- [Oregon BCD, Electrical individual licenses](https://www.oregon.gov/bcd/licensing/pages/electrical-apply.aspx) (checked 2026-10-19)
- [Oregon DCBS, Workers' compensation insurance and self-insurance](https://www.oregon.gov/dcbs/reports/compensation/insurance/pages/index.aspx) (checked 2026-10-19)
- [SAIF, Company information](https://www.saif.com/aboutsaif/company-information.html) (checked 2026-10-19)
- [City of Portland Revenue Division, Business tax filing and payment information](https://www.portland.gov/revenue/business-tax) (checked 2026-10-19)

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Written by BRIX Editorial Team. Last updated 2026-10-19. General information, not tax, legal or financial advice.
Canonical: https://www.brix.so/taxes/oregon