A tax provision buried in Oregon's 2024 revenue bill offers restaurants a direct credit for creating jobs—but most owners haven't heard about it yet.
Most Oregon restaurant owners don't realize that a new state tax credit for job creation is coming their way—if they meet specific conditions and take steps to claim it.
Tucked into SB1507 (Relating to revenue; and prescribing an effective date), signed into law in 2024, is a provision that lets small businesses claim a $1,000 nonrefundable income or excise tax credit for each net new job they create. For restaurants, this could mean real money back on your taxes if you're actively hiring.
To claim the credit, your restaurant must:
The credit is capped at 10 new jobs per tax year, meaning a maximum of $10,000 per year. It's a nonrefundable credit, which means it reduces your tax liability but won't result in a refund if the credit exceeds what you owe. However, any unused credit can carry forward for up to three succeeding tax years, giving you flexibility if you don't have enough tax liability in the year you create the jobs.
The provision takes effect for tax years beginning on or after January 1, 2026, and expires before January 1, 2032. That gives restaurants a six-year window to take advantage of it. The state has set a total statewide cap on credits, so availability may be limited depending on demand across Oregon.
This timing matters: if you're planning to expand your team or open a new location, understanding this credit now gives you time to structure hiring decisions strategically and prepare documentation for the Business Development Department.
For restaurants operating on thin margins, a $1,000-per-employee tax credit can offset some of the cost of hiring and training. If you're considering adding kitchen staff, servers, or management, this credit effectively reduces the net cost of those positions in your first year.
The 150% minimum wage threshold is important: as of 2024, Oregon's minimum wage varies by region (roughly $14–$15 per hour), so 150% would be approximately $21–$22.50 per hour. This isn't entry-level pay, but it's achievable for many restaurant positions and aligns with competitive wages needed to attract reliable staff.
The certification requirement means you'll need to work with the Oregon Business Development Department before claiming the credit on your taxes. This is an extra step, but it protects the program's integrity and ensures you're eligible.
If you're planning to hire in 2026 or beyond, document your current staffing levels now. When you create new positions, keep records showing they're genuinely net new jobs. Contact the Oregon Business Development Department in advance of your tax filing to understand the certification process and timeline.
For detailed guidance specific to your restaurant's situation, the Oregon Business Development Department and your tax advisor can walk you through eligibility and application procedures.
Source: SB1507, Section 12, Pages 2–3; effective for tax years beginning January 1, 2026, through December 31, 2031.