The Oregon statewide transit tax is a flat 0.1% payroll tax on wages that funds public transportation across the state. It applies to every Oregon resident’s wages no matter where they’re earned, and to nonresidents’ wages for work performed in Oregon.1Oregon Department of Revenue. Statewide Transit Tax Your employer withholds it from each paycheck, so in most cases there’s nothing extra for you to file. The tax has been in effect since July 1, 2018, under House Bill 2017 and ORS 320.550.
Who Pays It
Two groups of workers are covered: Oregon residents earning wages anywhere, and nonresidents performing services inside Oregon. There’s no income threshold, no wage cap, and no exemption for part-time or seasonal work. Even employees whose earnings are too low to trigger regular Oregon income tax withholding still owe the statewide transit tax.1Oregon Department of Revenue. Statewide Transit Tax
Self-employment income is not subject to this tax, and independent contractors are excluded from the definition of covered wages.1Oregon Department of Revenue. Statewide Transit Tax Oregon does have a separate transit self-employment tax that applies to self-employed people earning more than $400 in net self-employment income inside the TriMet or Lane Transit District service areas, but that’s a different obligation with its own return.2Oregon Department of Revenue. Transit Self-employment Taxes
How Much It Costs
The rate is 0.1% of gross wages, or 0.001 as a decimal. Multiply your gross pay by 0.001 to get the tax for that period. On $1,000 in gross wages, you owe $1. On $50,000 in annual wages, $50 for the year.1Oregon Department of Revenue. Statewide Transit Tax There is no annual cap, so unlike Social Security, the tax keeps applying no matter how high your wages climb. Employers withhold it from your pay rather than paying it separately as a business expense.
What You’ll See on Your W-2
Your employer reports the tax withheld in Box 14 of your W-2 with the label “ORSTT W/H.”3Oregon Secretary of State. OAR 150-316-0359 – W-2 Reporting Requirements If the correct amount was withheld all year, you don’t need to file anything extra. The tax owed for the year is calculated by adding wages from Box 16 of every W-2 and multiplying by 0.001.4Oregon Public Law. OAR 150-320-0520 – Statewide Transit Tax Reporting and Payment Due Dates
If your employer didn’t withhold or withheld too little, you file Form OR-STI, the Oregon Statewide Transit Individual Tax Return, to pay the difference. The 2025 OR-STI return is due April 15, 2026, matching the regular income tax deadline.5Oregon Department of Revenue. Form OR-STI Instructions – 2025 This usually comes up when an out-of-state employer isn’t familiar with Oregon’s withholding rules.
Employer Filing Requirements
Every Oregon employer must withhold and remit this tax regardless of business size. Out-of-state employers with Oregon-resident remote workers, or with employees working at Oregon job sites, have withholding obligations too. Three forms handle the reporting:
- Form OR-STT-1, the quarterly withholding return, reports total subject wages and total tax withheld for the quarter.6Oregon Department of Revenue. Form OR-STT-1 – Oregon Quarterly Statewide Transit Tax Withholding Return
- Form OR-STT-2 is the employee detail report, breaking down withholding for each worker.
- Form OR-STT-A is the annual return available to agricultural employers and others approved for annual filing.7Oregon Department of Revenue. Form OR-STT-A – Oregon Annual Statewide Transit Tax Withholding Return
Quarterly returns are due on the last day of the month after each calendar quarter: April 30, July 31, October 31, and January 31.4Oregon Public Law. OAR 150-320-0520 – Statewide Transit Tax Reporting and Payment Due Dates Agricultural employers can choose quarterly or annual filing. Annual filers must remit and report by January 31 following the end of the calendar year.1Oregon Department of Revenue. Statewide Transit Tax Employers with no payroll for a period still need to file a zero return.
How to File and Pay
The Oregon Department of Revenue’s Revenue Online portal is the primary filing method. Employers can file electronically, upload a spreadsheet with employee withholding details instead of entering each worker manually, and pay by electronic funds transfer. Paper returns can be mailed to the Oregon Department of Revenue; the address printed on Form OR-STT-A is PO Box 14800, Salem, OR 97309-0920.7Oregon Department of Revenue. Form OR-STT-A – Oregon Annual Statewide Transit Tax Withholding Return Verify the mailing address on your specific form’s instructions, since the department uses different PO boxes for different tax types. Checks are made payable to the Oregon Department of Revenue with the employer’s business identification number written on the check.
Penalties and Interest for Employers
An employer who knowingly fails to withhold the tax faces a penalty of $250 per employee, up to $25,000 per tax period, on top of any other penalties and interest allowed under state law.1Oregon Department of Revenue. Statewide Transit Tax “Knowingly” is the key word: this targets employers who ignore the obligation, not those who make honest processing errors.
Late payments accrue interest at Oregon’s standard delinquent tax rate, which is 8% annually for 2026. If the balance stays unpaid for more than 60 days after certain triggering events, the rate rises to 12% under the state’s Tier Two rules.8Oregon Department of Revenue. Annual Interest Rate Update for 2026 Interest compounds daily, so small underpayments grow quickly when left unresolved.
Where the Money Goes
Revenue flows into the Statewide Transportation Improvement Fund, which distributes money to transit agencies, counties, and federally recognized tribes across Oregon.9Oregon Department of Transportation. HB 2017 Funding Ninety percent goes directly to qualified local entities that submit public transportation improvement plans. The remainder supports competitive grants, intercommunity service improvements, and a statewide technical resource center for rural transit planning. The program was designed to expand transit access for rural areas, seniors, and people with disabilities.