A tax credit buried in SB1507 could offset hiring costs for Oregon professional services firms—but only if you know it exists and meet specific requirements.
Most Oregon professional services owners have no idea that SB1507, signed into law as a revenue bill, contains a job creation tax credit that could directly reduce their state taxes. The provision is easy to miss—it's tucked into Section 12 on pages 2–3—but it's worth understanding if you're planning to hire.
Oregon now offers a nonrefundable income and excise tax credit of $1,000 per net new job created by eligible employers. The credit applies to tax years beginning January 1, 2026, through December 31, 2031. That's a six-year window.
The math is straightforward: if you hire five new employees who meet the wage requirement, you can claim $5,000 in tax credits that year. The maximum is 10 jobs per tax year, capping the credit at $10,000 annually per business.
To claim the credit, your new hires must be paid at least 150% of Oregon's minimum wage. The jobs must be net new—meaning they represent actual growth in your workforce, not replacements for existing positions.
You'll need written certification from the Oregon Business Development Department before claiming the credit. This isn't automatic; you have to apply and get approval.
If your tax liability in a given year is smaller than your available credit, you don't lose the money. Unused credits carry forward for up to three succeeding tax years. For example, if you claim $8,000 in credits but only owe $5,000 in taxes, the remaining $3,000 can be applied to future years' taxes.
This matters for smaller firms or those with variable income—you get time to use the full benefit.
The credit is nonrefundable, meaning you can't receive a refund if the credit exceeds your tax liability. You can only use it to reduce what you owe.
There's also a statewide cap on total credits awarded, though the specific cap amount isn't detailed in the bill language itself. Once the state reaches its limit, no new certifications will be issued that year. This means timing matters—early applicants are more likely to secure certification.
If you're considering expanding your professional services firm in Oregon, this credit effectively reduces the after-tax cost of new hires earning 150% of minimum wage or more. For a firm hiring multiple employees, the cumulative benefit over several years could be meaningful.
The six-year window (2026–2031) gives you time to plan, but the statewide cap means you should apply promptly once you've made hiring decisions. The certification requirement also means budgeting time to work with the Business Development Department.
Professional services firms—accounting, consulting, engineering, legal, and similar—should review whether their typical entry-level and mid-level positions already meet the 150% minimum wage threshold. Many do, which makes this credit more immediately useful than it might appear.
Source: Oregon SB1507, Section 12, Pages 2–3, effective for tax years beginning January 1, 2026, and before January 1, 2032.