A tax incentive buried in SB1507 lets Oregon restaurant owners reduce their tax bill dollar-for-dollar when they hire and retain new workers—but only if you know it exists.
Most Oregon restaurant owners have never heard of the job creation tax credit in SB1507. That's a problem, because it could put real money back in your business starting next year.
Here's what's actually in the bill: if you create net new jobs in Oregon and pay those employees at least 150% of the state minimum wage, you can claim a direct tax credit of up to $1,000 per job, per year. That means a restaurant that hires 10 new workers could reduce its state income or corporate excise tax by up to $10,000 annually—dollar-for-dollar, not a deduction.
The credit is available to small businesses that meet two conditions: you must create net new jobs (meaning more jobs than you had the previous year), and those employees must earn at least 150% of Oregon's minimum wage. For context, that threshold is significantly higher than minimum wage itself, which suggests the state is targeting quality job creation, not just any hiring.
The credit requires certification from the Oregon Business Development Department, so you can't simply claim it on your return. You'll need to apply and have your job creation verified before you can use the credit against your tax liability.
This provision applies to tax years beginning on or after January 1, 2026, and before January 1, 2032. That's a six-year window. If you're planning to hire in 2026 or beyond, this is worth tracking.
The cap is $10,000 per year (10 jobs × $1,000), so the credit is designed for small to mid-sized operations, not massive expansion. For a restaurant adding a few full-time positions, that's meaningful tax relief.
If you've been considering hiring but worried about the bottom line, this changes the math slightly. The credit doesn't pay wages, but it does reduce your state tax burden when you do hire—effectively lowering the after-tax cost of adding payroll.
The 150% minimum wage threshold is the key detail. You can't hire at minimum wage and claim the credit. The state is explicitly rewarding restaurants that pay above that floor, which aligns with labor market realities in hospitality.
One practical note: because certification from the Business Development Department is required, you'll want to document your hiring carefully and plan to apply for certification in the year you create the new positions. Don't assume the credit is automatic.
The credit is found in Section 12(2)(a) of SB1507 (page 3), and the effective date window is set in Section 14.
If you're planning hires in 2026 or later, it's worth a conversation with your accountant about whether your wage structure and hiring timeline align with this credit. The Oregon Business Development Department will have application details as the effective date approaches.
Source: SB1507, Relating to revenue; and prescribing an effective date. Section 12(2)(a), Section 14.