Who Is Subject to the Portland Metro Tax? Residents, Businesses, Thresholds

You are subject to the Portland Metro tax if you live, work, or do business inside the Metro district and your income or your business’s gross receipts clear the thresholds set for the Supportive Housing Services (SHS) tax. For individuals in tax year 2026, that threshold is $128,000 of taxable income for single filers and $205,000 for joint filers. For businesses, it is more than $5 million in total gross receipts from all sources, so long as the business operates within the Metro district. The tax rate is 1% in either case, applied only to income above the line.¹²

The Personal Income Thresholds

For tax year 2026, single filers owe the 1% tax on Metro taxable income above $128,000. Joint filers owe it on income above $205,000. Those figures replaced the $125,000 and $200,000 thresholds that applied for tax years 2021 through 2025, and from 2026 forward the amounts are updated each November for inflation.²³

“Single” covers people filing as married filing separately. “Joint” covers married filing jointly, head of household, and qualifying surviving spouse.²

The tax is marginal. If you file single and your Metro taxable income is $138,000, you owe 1% of the $10,000 above the threshold, or $100. A couple filing jointly with $225,000 owes 1% of $20,000, or $200.⁴ Metro taxable income begins with your Oregon taxable income from your state return.²

Whether Your Address Is Inside the Metro District

The Metro district covers portions of Clackamas, Multnomah, and Washington counties, but it does not track city or county lines. Some addresses that feel like Portland sit outside the boundary, and some addresses well outside Portland proper sit inside it. Metro runs a free address lookup tool that tells you immediately whether a given address falls inside the taxing jurisdiction.⁵ Check your home address and your work address separately. Each can pull you into the tax independently.

Non-Residents and Part-Year Residents

Living outside the Metro district does not get you off the hook. Non-residents owe the 1% tax on income sourced within the Metro boundary, after applying the same threshold for their filing status. A single non-resident with $200,000 in Metro-sourced income in 2026 would owe 1% on the amount above $128,000.⁶

Part-year residents are taxed on income from all sources earned while they lived in the district. After moving away, only Metro-sourced income counts for the rest of the year.² Non-residents and part-year residents file Form MET-40-NP; full-year residents file Form MET-40.⁷

If you have business activity both inside and outside the district, you apportion the income to figure out how much is Metro-sourced. Metro uses the same apportionment methods as Multnomah County and the City of Portland.⁶

Businesses That Owe the Tax

A separate 1% business income tax applies to any business doing business inside the Metro district whose total gross receipts from everywhere, not just the Metro area, exceed $5 million.¹ The $5 million test is a gate, not the tax base. The tax itself falls on net income apportioned to the Metro district, so a business with $8 million in receipts and modest net income will often owe much less than the gate figure suggests.

The business tax reaches C corporations, S corporations, partnerships, limited liability companies, and estates or trusts operating as businesses. Estates and trusts that meet the $5 million threshold pay at least a $100 minimum tax even when apportioned net income would produce less.⁸

Sole proprietorships and single-member LLCs treated as disregarded entities do not file the business tax. Their income flows through to the owner’s personal return and is taxed there if the owner’s income clears the personal threshold.⁸ Businesses that owe the tax must register for a Revenue Division tax account through Portland Revenue Online.⁹

What Income Counts

Because Metro taxable income starts with Oregon taxable income, most of what Oregon taxes feeds into the Metro calculation. That includes wages, salaries, self-employment earnings, investment income, and distributions from retirement accounts. Pass-through income from partnerships or S corporations counts toward your personal Metro income.²

Two retirement carve-outs are worth knowing because Oregon itself taxes these dollars. Oregon Public Employees Retirement System (PERS) benefits and federal retirement benefits, including FERS, CSRS, and military retirement pay, are exempt from the Metro tax under Oregon law.⁶ Other retirement income, such as 401(k) distributions, traditional IRA withdrawals, and private pensions, is taxable if your total income exceeds the filing threshold. To claim the PERS or federal retirement exemption, attach Form 1099-R for each exempt source.¹⁰

Employees and Paycheck Withholding

If you work for an employer located in the Metro district and earn $200,000 or more per year, your employer is required to withhold the SHS tax from your paycheck. That rule has been in force since January 2022.⁶ Employees earning less than $200,000 can opt in to voluntary withholding if they expect to owe the tax at filing time.² Mandatory withholding does not change who owes the tax; it just collects it earlier.

How Long the Tax Will Apply

The Metro SHS tax is scheduled to expire after tax year 2030 under current law. Any continuation past that date would need a new vote or legislative action.¹

1
Metro. Supportive Housing Services: Addressing Homelessness in Greater Portland
2
Portland.gov. Personal Income Tax Filing and Payment Information
3
Metro. Pay My Supportive Housing Services Taxes
4
Metro. Income Tax Information
5
Metro. Metro Boundary Address Lookup
6
Metro. Supportive Housing Services Taxes Frequently Asked Questions
7
Portland.gov. File Your Personal Tax Returns
8
Portland.gov. Instructions for 2025 Form METBIT-41
9
Portland.gov. Register for a Revenue Division Tax Account
10
Portland.gov. 2025 Form MET-40 Personal Income Tax Return Instructions