A tax credit buried in Oregon's 2024 revenue bill could put money back in your pocket when you hire.
Most Oregon auto service owners haven't heard about a provision in SB1507 that could reduce their state taxes by up to $10,000 per year—simply for hiring new employees. It's real, it's available starting in 2026, and it has specific requirements worth understanding now.
Under Section 12 of SB1507, small businesses in Oregon can claim a $1,000 nonrefundable income or excise tax credit for each net new job created, up to 10 jobs annually. That means a shop that hires five new technicians in a single tax year could claim $5,000 in credits; one that hires ten could claim the full $10,000 cap.
The catch: those new employees must earn at least 150% of Oregon's minimum wage. Currently, that's roughly $20.70 per hour (150% of the state minimum). The credit applies only to net new jobs—positions that represent actual growth beyond your current headcount, not replacements for departing staff.
You can't simply claim this credit on your tax return. You must first obtain written certification from the Oregon Business Development Department confirming that your new hires meet the wage requirement and represent net new positions. Plan ahead: the certification process takes time, so don't wait until tax season to apply.
The credit is nonrefundable, meaning it reduces your tax liability but won't generate a refund if it exceeds what you owe. However, any unused portion carries forward for up to three succeeding tax years, giving you flexibility if you don't have enough tax liability in year one to use the full credit.
This credit is available for tax years beginning on or after January 1, 2026, and before January 1, 2032. That's a six-year window. The state has also capped total credits statewide, meaning the program has a finite budget—first-come, first-served matters.
Auto service shops often struggle to attract and retain skilled technicians. A $1,000 annual credit per new hire doesn't replace competitive wages, but it does offset some of your hiring costs. If you're planning to expand your team—adding a technician, service advisor, or shop manager—this credit makes that expansion slightly less expensive from a tax perspective.
The wage floor (150% of minimum) is achievable for most skilled positions in auto services. Entry-level techs and experienced advisors typically earn well above that threshold in Oregon's market.
If you're considering hiring in 2026 or beyond, familiarize yourself with the certification process now. Contact the Oregon Business Development Department early to understand their application timeline. Keep detailed records of new hires and their wages. And remember: the credit expires after 2031, so this is a limited-time opportunity.
Source: Oregon SB1507, Section 12, Pages 2–3. For Oregon-specific business guidance, contact your local business association or the Oregon Business Development Department.