A tax incentive buried in Oregon's 2024 revenue bill could offset hiring costs for auto service shops—but only if you know it exists and meet the requirements.
Most Oregon auto service owners have no idea that SB1507, passed in 2024, created a direct tax credit worth up to $1,000 per net new employee they hire. It's the kind of provision that gets lost in a 100-page revenue bill, but it could meaningfully reduce your tax liability if you're planning to grow your workforce.
Under Section 12(2)(a) of SB1507, Oregon small businesses can claim a tax credit of $1,000 for each net new job created in Oregon, up to a maximum of 10 jobs per year—meaning up to $10,000 in annual credits. The credit reduces your income tax or corporate excise tax liability dollar-for-dollar after you're certified by the Oregon Business Development Department.
The catch: the job must pay at least 150% of Oregon's minimum wage. For context, that's significantly above entry-level pay, which means technician, service advisor, and management positions would likely qualify, depending on your wage structure.
The credit applies to net new jobs—meaning you can't claim it for replacing someone who left. You need to show a genuine increase in headcount. Once you've hired and the employee meets the wage requirement, you submit certification to the Oregon Business Development Department. They verify the job meets criteria, and you can then claim the credit on your tax return.
This matters most if you're in a growth phase: opening a second location, expanding your service bays, or adding staff to handle increased demand. If you're flat or shrinking, the credit won't apply.
The credit is available for tax years beginning on or after January 1, 2026, and before January 1, 2032. That's a six-year window. If you're planning hires in 2026 or beyond, this is worth factoring into your hiring and tax planning conversations with your accountant.
The key date to remember: January 1, 2026. Hires before that don't qualify under this provision.
Labor costs are a major line item for auto service shops. A $1,000 tax credit per hire doesn't cover a technician's salary, but it does offset some of the cost of onboarding, training, and carrying a new employee through their first months. For shops planning to hire multiple technicians or service advisors over the next few years, the credits could add up to meaningful tax savings.
The credit also signals state intent to encourage job creation in Oregon's service sector, which matters if you're weighing expansion decisions.
If you're planning to hire in 2026 or later, talk to your accountant or tax advisor about how to track new hires and document wage compliance. You'll need to file for certification with the Oregon Business Development Department before claiming the credit. Keep records of hire dates, wages, and job descriptions.
For a detailed breakdown specific to your shop's situation, the Oregon Business Development Department has published guidance on SB1507 compliance and the certification process.
Source: SB1507, Section 12(2)(a), effective for tax years beginning January 1, 2026 through December 31, 2031.