A tax incentive buried in SB1507 rewards Oregon auto service businesses that hire—but only if you know the rules and apply early.
Most Oregon auto service owners haven't heard about a provision in SB1507 that could reduce their state income or excise taxes by up to $10,000 per year. The credit exists, it's real, and it's designed specifically to reward businesses that create net new jobs. But it requires advance approval and careful planning to claim.
Under Section 12 of SB1507, Oregon employers can receive a $1,000 nonrefundable tax credit for each net new job created, up to 10 jobs per year. The catch: the job must pay at least 150% of Oregon's minimum wage. For an auto service business, that means a qualifying position would need to pay significantly above the state minimum.
The credit is capped at $10,000 per taxpayer annually and $12.5 million statewide. If you don't use the full credit in a given year, unused amounts can carry forward for up to three subsequent tax years—meaning you don't lose money if you can't claim it all at once.
The credit applies to tax years beginning on or after January 1, 2026, and before January 1, 2032. This is a six-year window, so the opportunity isn't permanent.
Critically, you cannot simply claim this credit on your tax return. The Oregon Business Development Department must pre-certify your jobs before you can claim the credit. This means if you're planning to hire in 2026, you need to understand the certification process now and factor it into your hiring timeline.
For auto service shops planning to expand their workforce, this credit can offset state tax liability if you're hiring above the 150% minimum wage threshold. A shop adding three new technicians or service advisors at qualifying wages could potentially claim $3,000 in credits annually—assuming they meet the net new job requirement and receive pre-certification.
The wage floor is the real constraint. You must verify that positions pay at least 150% of the current Oregon minimum wage. As the minimum wage changes annually in Oregon, this threshold will shift, so wages that qualify one year might not the next.
The credit is nonrefundable, meaning it reduces taxes owed but won't generate a refund if the credit exceeds your tax liability. This matters most for smaller shops with lower tax bills.
If you're considering hiring in 2026 or beyond, contact the Oregon Business Development Department early to understand the pre-certification requirements. Ask specifically about the wage thresholds for your region and the documentation you'll need to prove net new job creation. Keep detailed hiring records and wage documentation—the state will require proof.
This credit is one of several tax provisions in SB1507 aimed at supporting Oregon business growth. Understanding which ones apply to your operation takes work, but the payoff can be real.
Source: Oregon SB1507, Section 12, Page 3. For specific guidance on your situation, consult a tax professional or the Oregon Business Development Department.