Oregon manufacturers can now claim a new Oregon manufacturing tax credit for creating qualifying jobs in the state. If your company is hiring in advanced manufacturing, food and beverage processing, clean technology, high technology, bioscience, forestry and wood products, or outdoor gear and apparel, this credit is worth a close look before the 2026 application window closes.
Below, we break down how the Qualified Jobs Creation Tax Credit (QJCTC) works, who qualifies, how much it’s worth, and the steps to apply, based on the current statute, Oregon Department of Revenue guidance, and Oregon Business Development Department (OBDD) rules (Oregon DOR, 2026 Summary of Legislation; Oregon Legislature, SB 1507 A Staff Measure Summary).
What is the Qualified Jobs Creation Tax Credit?
The QJCTC is a new Oregon personal and corporate income tax credit created by Senate Bill 1507 and narrowed to specific priority industries by House Bill 4084. It rewards businesses that grow their Oregon workforce in one of seven state-designated sectors: advanced manufacturing, food and beverage processing, clean technology, high technology, bioscience and biotechnology, forestry and wood products, and outdoor gear and apparel (Geffen Mesher; Oregon Legislature, SB 1507-7). The credit applies to tax years 2026 through 2031.
How much is the credit worth?
Eligible businesses may receive:
- $1,000 for each qualifying net new Oregon job
- Up to 10 jobs per taxpayer
- A maximum credit of $10,000 per taxpayer per tax year, before any statewide proration
The credit is nonrefundable. It can reduce Oregon tax owed, but it generally cannot generate a refund on its own. Any unused portion may be carried forward for up to three succeeding tax years (Oregon Legislature, Revenue Impact of Proposed Legislation).
What counts as a qualifying job?
Oregon measures job growth by comparing average monthly employment across two consecutive 12-month periods, not a single point-in-time headcount snapshot. This approach is designed to capture genuine, sustained employment growth rather than a temporary staffing bump (Geffen Mesher).
Each new position must also clear a wage threshold. The employee must earn at least 150% of the applicable Oregon minimum wage for the county where they primarily work. This test is based strictly on hourly compensation. Benefits like health insurance and retirement contributions do not count toward the threshold (Oregon Legislature, SB 1507-7).
Which manufacturers qualify for the credit?
To qualify for the Oregon manufacturing tax credit, a business’s primary activity must fall within one of the seven priority industries. For advanced manufacturing specifically, that generally means operations built around automation, software, industrial sensors, networking, advanced computation, or newly developed materials and processes.
The following activities generally do not qualify as advanced manufacturing on their own:
- Routine assembly, packaging, or labeling
- Warehousing and distribution
- Ordinary repair and maintenance
- Administrative work
- Sales activities
A company also cannot qualify solely because it supplies or supports another qualified manufacturer. The primary-activity test applies to the business claiming the credit.
How to apply
Businesses must apply to the Oregon Business Development Department (OBDD) and receive written certification before claiming the credit on a tax return. The application requires documentation of your industry classification, employees, wages, measurement periods, and net new jobs created (Oregon Legislature, SB 1507-7).
Key 2026 timeline:
- Application period: Expected to run during the second half of 2026
- Application deadline: No later than October 31, 2026
- Certification: Generally issued by January 15, 2027
Start gathering your payroll and unemployment insurance records now. These will be the backbone of your application.
A simple example
Say a manufacturer’s average qualifying employment grows from 40 employees to 47 employees across the two required measurement periods. If all seven additional positions meet the 150%-of-minimum-wage requirement and the company receives OBDD certification, the requested credit would be $7,000.
Keep in mind, the final credit could be reduced proportionately if statewide approved applications exceed Oregon’s $12.5 million annual program cap (Oregon Legislature, SB 1507 A Staff Measure Summary).
Plan ahead: a checklist for manufacturers
- Confirm eligibility. Verify your primary business activity falls within one of the seven qualified industries.
- Compare employment periods. Calculate average qualifying employment across the two required 12-month periods.
- Check compensation. Review hourly wages for each potential qualifying employee against the 150%-of-minimum-wage threshold for that employee’s county.
- Preserve documentation. Keep payroll, wage, unemployment insurance, and industry classification records organized and accessible.
- Apply for certification. Submit your OBDD application before claiming the credit. Don’t wait until filing season.
Frequently asked questions
Is the Oregon QJCTC refundable? No. It’s nonrefundable, meaning it can only reduce tax you actually owe. Unused amounts carry forward up to three tax years.
How much can one company claim per year? Up to $10,000 per taxpayer per tax year ($1,000 per net new qualifying job, capped at 10 jobs), subject to proration if the statewide $12.5 million cap is exceeded.
Do I need approval before claiming the credit? Yes. You must receive written certification from the Oregon Business Development Department before claiming the credit on your return.
Does routine warehouse or admin hiring count? Generally no. Those roles don’t qualify as advanced manufacturing on their own, even if your company is in a qualifying industry.
The bottom line
For most Oregon manufacturers, the QJCTC is the most immediately relevant new state incentive: up to $10,000 per taxpayer per year for certified net new qualifying jobs, subject to wage, industry, application, tax liability, and statewide cap limitations. The dollar amount is modest, but for companies actively expanding their Oregon workforce at qualifying wages, this Oregon manufacturing tax credit is a straightforward benefit worth capturing.
A separate equipment property tax exemption may also be relevant to some manufacturers, though its availability depends on final enactment and local adoption, something our team is continuing to monitor.
Have questions about whether your business qualifies for the Oregon manufacturing tax credit, or need help preparing your OBDD certification application? Let’s chat.
