The Portland Business License Tax is a 2.6% tax on the net income your business earns from activity inside city limits. Portland’s Revenue Division administers it alongside Multnomah County’s 2% Business Income Tax, and both are reported on a single combined return.1Portland.gov. Business Tax Filing and Payment Information If you do any work for profit in Portland, you almost certainly need to register, file annually, and, above a certain liability, pay in quarterly.
Who Has to Pay
Portland reads “doing business” broadly. Corporations, LLCs, partnerships, and sole proprietors all fall in, and so do freelancers, consultants, and landlords managing rental property. You don’t need a Portland address. Selling goods delivered into the city, or performing services for clients located there, is enough to create an obligation on the income tied to that activity.2Portland.gov. Chapter 7.02 Business License Law
One clear exclusion: wages paid to you as an employee on a W-2 are not business income and are not subject to this tax.2Portland.gov. Chapter 7.02 Business License Law
Small businesses get a break based on gross receipts, not net income. For tax year 2026, if your gross receipts from all sources (inside and outside Portland) are $75,000 or less, you’re exempt from paying. The threshold rises to $100,000 for tax years beginning on or after January 1, 2027. Nonprofits that are exempt from the Oregon Corporation Excise Tax and 501-status trusts are also exempt, though they still owe tax on any unrelated business income.3Portland.gov. Portland City Code 7.02.400 – Exemptions
Being exempt from paying doesn’t mean skipping the paperwork. File anyway to keep your account in good standing. Silence tends to generate delinquency notices or estimated assessments, and unwinding those later takes more work than a timely filing would have.
How the 2.6% Is Calculated
The tax runs on net income, defined the same way as your Oregon net income for state income or corporate excise tax, before any allocation for out-of-state operations and before net operating loss carryforwards or carrybacks.2Portland.gov. Chapter 7.02 Business License Law
If everything you do happens in Portland, 100% of that net income is taxed by the city. If you operate elsewhere too, you apportion income to Portland using a single sales factor. Sales of tangible goods count as Portland sales when the buyer takes delivery in the city, regardless of where the product shipped from.4Portland.gov. Portland City Code 7.02.611 – Apportionment of Income Some industries follow specialized methods based on Oregon administrative rules, but single-factor sales is the default.
Registering With the Revenue Division
Every business must register within 60 days of starting activity in Portland.1Portland.gov. Business Tax Filing and Payment Information Registration runs through Portland Revenue Online, the city’s tax portal. You’ll need your tax identification number: an EIN for entities, or your Social Security number if you’re a sole proprietor.5Portland.gov. Register for a Revenue Division Tax Account The start date you enter should be when you first conducted business in the city, not your incorporation date.
Filing and Paying
You file one combined return covering both the city’s 2.6% tax and the county’s 2%. Most filers use Portland Revenue Online, which calculates the amount owed and confirms receipt immediately. Paper forms are available from the Revenue Division if you prefer.6Portland.gov. Revenue Division Business Tax Forms
The return is due on the 15th day of the fourth month after your tax year closes, which is April 15 for calendar-year filers. If you need more time, submit Form EXT by the original due date, or rely on a timely federal extension. Either buys you six additional months to file. It does not buy you time to pay: the tax itself is still due on the original deadline, and interest starts running the day after.7Portland.gov. File Your Business Tax Returns
Quarterly Estimated Payments
If you expect your Portland tax liability to reach $1,000 or more for the year, quarterly estimated payments are required.8Portland.gov. Chapter 7.02 Business License Law – Section 7.02.520 For a calendar-year taxpayer, the schedule is:
- At least 25% of the estimated tax by April 15
- At least 25% by June 15
- At least 25% by September 15
- The remaining balance by December 15
Underpaying or skipping an installment triggers interest on the shortfall, calculated from each quarterly due date through the original due date of the annual return. This trips up filers who file an accurate annual return on time and still get an interest bill because they didn’t pay enough during the year.
Penalties and Interest for Late Filing
Late filing penalties escalate quickly. File or pay less than four months after the due date and the penalty is 5% of the total tax liability, with a $5 minimum. Once you cross four months late, an additional 20% penalty is added, bringing the total to 25% of the tax owed.9Portland.gov. Portland City Code 7.02.700 – Penalties These can stack: being late after the original due date and again late after an extended due date can each trigger up to 25%.10Portland.gov. Penalty Assessment
Interest runs separately at 0.833% per month (10% annually), from the original due date through the 15th of the month after payment is received.11Portland.gov. Chapter 7.02 Business License Law – Section 7.02.710 On a $5,000 balance, that’s roughly $42 a month in interest before any penalty. An extension protects you from late-filing penalties, but interest keeps running unless you’ve paid in full by the original deadline.
The Other Local Taxes on the Same Return
The 2.6% isn’t the whole picture. Multnomah County’s 2% Business Income Tax rides on the same combined filing, so a Portland business is looking at 4.6% of apportioned net income in local tax before Oregon’s state taxes enter the calculation.1Portland.gov. Business Tax Filing and Payment Information
Larger businesses face a third layer. Metro’s Supportive Housing Services program adds a 1% tax on net income when gross receipts everywhere exceed $5 million.12Metro. Pay My Supportive Housing Services Taxes The Revenue Division collects it on Metro’s behalf as part of the same filing. The Metro SHS tax is currently scheduled to expire in 2030. Businesses over the $5 million threshold end up at a combined 5.6% local rate on net income.