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City of Portland Business License Tax
Multnomah County Business Income Tax
Form SC-2023 Business Tax Return for S Corporations Instructions

• Federal Form 8825 and statements (if filed)
General Information • Federal Form 4797 and statements (if filed)
• Any K-1s issued to shareholders
Important Reminders • Oregon Form OR-20S if any Oregon modifications
are claimed
Note: C corporations should file C-2023. • HVT Schedule, if required (Portland form)
File and Pay Online and Manage your Business Tax • Schedule R, if required (Portland form)
Accounts at Pro.Portland.gov. The Revenue Division’s
taxpayer portal can be used to manage your business tax What’s New?

accounts. Portland Revenue Online (PRO) allows you to: Market Based Sourcing. For tax years beginning on or
• Register your business after January 1, 2023, the City of Portland and Multnomah
• Update your business account information County have adopted the Market Based Sourcing (MBS)
• File a Business Tax Return and single sales factor apportionment methodology to
• Make payments conform with the State of Oregon’s apportionment
• Upload supporting tax pages and documents methodology. This change includes adoption of the state’s
• View correspondence mailed to you nexus standards and the interstate application of federal
• Provide Third-Party Access to your preparer Public Law 86-272.
For more information and to create your account, please Downtown Business Incentive Credit. If your business
visit Pro.Portland.gov. entered into a new lease, extended a current lease, or
owned and occupied their own business space in Lower
Filing Deadline. The filing deadline for this return is April
15, 2024. Since the SC-2023 relies on information reported Albina, Lloyd District, Old Town/Chinatown, or Downtown
on the federal and/or Oregon tax return, the due date for the Portland, your business may be eligible for the Downtown
SC-2023 will be changed when there is a change to the Business Incentive Credit. Visit our webpage at
federal or State of Oregon due dates. portland.gov/revenue/dbi for more information about the
credit and how to determine if your business is eligible to
Extensions. The Revenue Division does not generally
apply for the credit.
allow an extension of time to pay the tax, even if the IRS
allows an extension. The tax balance is due on the original ‘Actual’ Previously Taxed Income Modification. If the S
return due date. The submission of an extension payment corporation elects to use the ‘actual’ method for allocating
by the original return due date provides an automatic six- its Multnomah County income subject to tax to
month filing extension. If there is not a tax balance due but shareholders, there is a box to indicate this election.
you would like to file an extension, your federal or State of
Increase to Owner’s Compensation Deduction. For tax
Oregon extension will serve as your Business Tax
years beginning on or after January 1, 2023, the maximum
extension and a separate extension will not need to be
owner’s compensation deduction has increased to
submitted. When filing your return on the extended due
date, check the “Extension Filed” box on the return. If no $152,500, per owner, for the City of Portland Business
extension payment was made, please attach a copy of your License Tax.
federal or State of Oregon extension with your return. For tax years beginning on or after January 1, 2023, the
Federal and State Tax Pages. Be sure to include the maximum owner’s compensation deduction has been
following federal tax pages (and statements), Oregon tax increased to $150,000, per owner, for the Multnomah
pages (and statements), and Portland schedules with your County Business Income Tax.
SC-2023 Business Tax Return, even if claiming an Increase to Residential Rental Registration Fee. For tax
exemption from the business taxes: years beginning on or after January 1, 2023, the Residential
• Federal Form 1120-S (pages 1 through 4) and Rental Registration fee has increased to $70 per unit.
statements
• Federal Form 1125-E and statements (if filed)

Page 1 of 7, SC-2023 Instructions (Rev. 01/29/2024)

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Amended Returns Exempt Businesses

The Revenue Division does not have a separate form for If your business is exempt from the City of Portland
amended tax returns. To amend your Business Tax Return, Business License Tax, as allowed under Portland City Code
use the form for the tax year being amended and check the (PCC) 7.02.400 or the Multnomah County Business Income
“Amended” box. If the address for the year you’re amending Tax, as allowed under Multnomah County Code (MCC)
has changed, use your current mailing address, and check 12.400, you are still required to file a Business Tax Return
the “Mailing Address Change” box. by the due date of your return. Failure to do so may result
in a Presumptive Fee bill and your account will remain in
Fill in all amounts on your amended return, even if they are
non-compliance status until the required documentation is
the same as originally filed. If you are amending to make a
received.
change to additions, subtractions, or credits, include detail
of all items and amounts as well as any carryovers. Please This exemption is from the business taxes only. Any other
include a statement explaining what changed from the tax, surcharge, or fee may fall under separate exemption
original return. criteria, for which your business may still be liable.

If you change taxable income by filing an original or Gross Receipts Exemption
amended federal or Oregon income tax return, you must file
an amended Business Tax Return within 60 days of when Note: The following amounts are taken from the federal
the original or amended federal or Oregon income tax return income tax return.
is filed. Include a copy of your original or amended federal To claim a gross receipts exemption from the City of
or Oregon income tax return with your amended Business Portland Business License Tax and/or the Multnomah
Tax Return and explain the adjustments made. County Business Income Tax, the total gross receipts from
all business activity must be under:
Do not amend your Business Tax Return if you amend the
federal return to carry a net operating loss back to prior • $50,000 for the City of Portland Business License
years. The Revenue Division only allows tax entities to carry Tax exemption, and
net operating losses forward. Additionally, net operating • $100,000 for the Multnomah County Business
losses for the City of Portland Business License Tax and/or Income Tax exemption.
Multnomah County Business Income Tax are only To calculate the total gross receipts from all business
generated from the Business Tax Return, not from your IRS activity, add the following lines together:
or Oregon income tax return.
• Form 1120-S. Add the sum of the positive numbers
On the prepayments line of your amended Business Tax reported on lines 1c, 4, and 5 from page 1 of Form
Return, enter the net tax for each jurisdiction as reflected on 1120-S. Add the sum of the positive numbers
the original return or as previously adjusted. Do not include reported on lines 3c through 10 of the Schedule K.
any penalty or interest portions of payments already made. • Form 8825. Add the positive numbers reported on
line 18a. If the S corporation owns any residential
Apportionment rental properties in the City of Portland, make sure
to complete and submit a Schedule R (with
In adopting Oregon’s apportionment law, both jurisdictions
payment) with your exemption request.
use Oregon’s single sales factor to apportion business
income to or away from the jurisdictions. Sales are all gross If your total gross receipts from all business activity are
receipts not allocated under ORS 314.615 to 314.645 that $50,000 or more, you do not qualify for the gross receipts
are received from transactions and activity in the regular exemption for the City of Portland Business License Tax.
course of business except as excluded by ORS 314.610(7), If your total gross receipts from all business activity are
the related statutes, and related rules. Refer to Oregon’s $100,000 or more, you do not qualify for the gross receipts
statutes and rules for guidance. Substitute city/Portland or exemption for the Multnomah County Business Income Tax.
county/Multnomah County for state/Oregon as needed.
With a few exceptions, income earned in Portland is also Other Exemptions
earned in Multnomah County. Income may be apportioned If you are claiming an exemption other than the gross
only if there is regular business activity both inside and receipts exemption, you must attach a statement that
outside these jurisdictions that allow another city and/or explains which exemption you are claiming and provide
county to impose a similar tax. support for that exemption (See Exemption Codes in the
Appendix).

Page 2 of 7, SC-2023 Instructions (Rev. 01/29/2024)

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Penalty Calculation                                               Late Payment Penalty 
You  may  be  subject  to  penalties  for  underpaying  your      Your 2023  business tax must be paid by  April 15, 2024, 
estimated tax, filing a late  Business  Tax Return, and/or        even if you requested an extension to file your Business Tax 
paying your business tax liability after the original due date    Return. If you do not pay your tax by the original due date, 
of the return.                                                    the following late payment penalties will apply: 
Although the Revenue Division assesses a late penalty for          •       5% of the amount of the tax that was not paid by the 
both failing to file a Business Tax Return by the due date                 original due date. 
and failing to pay the tax  by the original due date of the        •       An additional penalty of 20% of the unpaid tax must 
return, only one of these late penalties will be applied, even             be added if the failure to pay is for a period of four 
if there is a failure of both requirements. In these cases, only           months or more. 
the late filing penalty is applied.                                •       An additional penalty of 100% of the  unpaid  tax 
                                                                           liability of all tax years if the failure to pay is for three 
                                                                           or more consecutive years. 
Underpayment Penalty 
You may be subject to a penalty for underpaying your tax          Interest Calculation 
liability  if,  by the original  due  date of the return, timely 
payments are not made which are either: 
                                                                  Late Payment Interest 
 •     At  least 90%  of the total tax due  on line  21 
                                                                  Interest is calculated at 10% per annum (.00833 multiplied 
       (Multnomah County) and line 31 (City of Portland), 
       or                                                         by the number of months). Calculate your interest from the 
                                                                  original due date to the 15 thday of the month following the 
 •     100% of the prior year’s tax for each jurisdiction. 
                                                                  date of the payment. 
If you did not satisfy either requirement, you will be charged 
a 5% underpayment penalty on the unpaid amount, but not 
less than $5 per jurisdiction.                                    Quarterly Underpayment Interest 
                                                                  Quarterly underpayment  interest will be due if estimated 
Late Filing Penalty                                               payments were required  and  were underpaid. Calculate 
                                                                  your quarterly underpayment interest at a rate of 10% per 
If you do not file your Business Tax Return by the original 
                                                                  annum  from  the  due  date  of  each  quarterly  estimated 
due date, file an extension with the Revenue Division by the 
                                                                  payment to the original due date of the tax return to which 
original due date, or include a copy of your federal or state 
                                                                  the estimated payments apply. 
extension with your Business Tax Return when you file by 
the extended due date, the following late filing penalties will   The amount of underpayment is determined by comparing 
apply:                                                            the 90% of the current total tax liability amount to quarterly 
                                                                  estimated payments made prior to the original due date of 
 •     5% of the amount of the total tax liability if the failure the tax return. 
       to file is for a period less than four months. 
 •     An additional penalty of 20% of the total tax liability    There is no interest on underpayment of quarterly estimated 
       must be added if the Business Tax Return is four           payments if:  
       months or more past due.                                    •       The total tax liability of the prior tax year was less 
 •     An additional penalty of 100% of the total tax liability            than $1,000 for the jurisdiction; 
       of all tax years for any Business Tax Return which          •       An  amount equal  to  at least 90% of the total tax 
       is delinquent for three or more consecutive years.                  liability for the current tax year was paid  in 
No late filing penalty is due if a timely extension is filed with          accordance with PCC  7.02.530 and/or MCC 
the Revenue Division and a Business Tax Return is filed by                 12.530; or  
the  extended due date, or a copy of the federal  or state         •       An amount equal to at least 100% of the prior year’s 
extension is included with the Business Tax Return and the                 total tax liability was paid in accordance with PCC 
‘Extension Filed’ box is checked.                                          7.02.530 and/or MCC 12.530. 
                                                                   
Page 3 of 7, SC-2023 Instructions (Rev. 01/29/2024)

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Extension Filed Box. Check this box if you filed an
S Corporation Business Tax Return
extension to file your federal or state income taxes. Attach
Filing Instructions a copy of your federal or State of Oregon extension to your
Rounding. Round cents to whole dollars on your return and Business Tax Return.
schedules. To round, drop amounts under 50 cents and
Part I – Gross Income
increase amounts from 50 to 99 cents to the next dollar. For
example, $1.39 becomes $1 and $2.50 becomes $3. If two Line 1. Multnomah County gross income. Multnomah
or more amounts must be added to figure the amount to County gross income means “sales” as defined in Oregon
enter on a line, include cents when adding the amounts and statute and administrative rules, and includes income from
round off only the total. all business activity within Multnomah County (see
Apportionment instructions above).
General Return Information Line 2. Total gross income from all sources in all
locations. Total gross income means “sales” as defined in
Tax Year. Enter the beginning and ending dates for your tax
Oregon statute and administrative rules, and includes
year. For calendar year filers, this would be 01/01/2023 to
income from all business activity everywhere, as reported
12/31/2023.
on your federal Form 1120-S.
Account #. Enter your BZT account number (ten digits). Line 3. Multnomah County apportionment percentage.
This information can be found on letters the Revenue Line 1 divided by line 2. Round to 6 decimal places. This
Division has mailed to you related to your business tax line cannot be more than 1.0.
account. If you cannot find your account number, call the
Line 4. City of Portland gross income. Portland gross
Revenue Division at (503) 823-5157.
income means “sales” as defined in Oregon statute and
FEIN. Enter the Federal Employer Identification Number administrative rules, and includes income from all business
(FEIN) of the S corporation. activity within the City of Portland (see Apportionment
NAICS. Enter the NAICS (North American Industry instructions above).
Classification System) code for your business. Line 5. Total gross income from all sources in all
locations. Total gross income means “sales” as defined in
Name. Enter the legal name of the S corporation.
Oregon statute and administrative rules, and includes
NAICS. Enter the NAICS (North American Industry income from all business activity everywhere, as reported
Classification System) code for your business. on your federal Form 1120-S. Generally, this should be the
If you are a residential lessor limited to Federal Schedules same as the gross income reported on line 2, but there are
rare situations where this amount may be different.
E and D, enter a business code of 531110. Commercial
lessors should enter a business code of 531120. Line 6. City of Portland apportionment percentage. Line
4 divided by line 5. Round to 6 decimal places. This line
Mailing Address. Always enter your current mailing
cannot be more than 1.0.
address. If the address for the year you are filing has
changed from last year, check the box indicating the Exempt – Multnomah County. Check this box if you are
change. claiming an exemption from the Multnomah County
Business Income Tax and select a reason for the
Initial Return Box. Check this box if this is your first return
exemption. If your reason for being exempt is other than for
you are filing with us. Attach the Business Tax Registration
gross receipts, attach a statement explaining which
Form, if not mailed to us previously.
exemption you are claiming and provide support for that
Final Return Box. Check this box if you no longer conduct exemption (See Exemption Codes in the Appendix).
business in the City of Portland and/or Multnomah County
Exempt – City of Portland. Check this box if you are
and this is the final return you are filing with us. Attach an
claiming an exemption from the City of Portland Business
Out of Business Notification Form or an explanation for your
License Tax and select a reason for the exemption. If your
final return. If you have sold your business, indicate the
reason for being exempt is other than for gross receipts,
name and address of the entity you sold your business to.
attach a statement explaining which exemption you are
Amended Return Box. Check this box if you are amending claiming and provide support for that exemption (See
your 2023 tax return. See the Amended Returns instructions Exemption Codes in the Appendix).
above for more information about amending your Business
Tax Return.

Page 4 of 7, SC-2023 Instructions (Rev. 01/29/2024)

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NOTE: If you have claimed an exemption from the Line 10. Schedule K (lines 2– 12) and Oregon
Multnomah County and the City of Portland business taxes, Modifications on Form 20-S. Enter the total of the
you generally don’t need to fill out the following parts of the amounts from Schedule K lines 2 through 12. Add or
return: subtract any Oregon modifications related to business
income. Subtract any other pass-through income (or add
• Part II – Net Income any loss) from entities already taxed by the City of Portland
• Part III – Multnomah County Business Income Tax and/or Multnomah County. Attach a schedule for these
(if claiming an exemption from Multnomah County modifications.
Business Income Tax)
• Part IV – City of Portland Business License Tax (If No deduction is allowed for owner health insurance
claiming an exemption from the City of Portland premiums.
Business License Tax) Line 11. Adjusted net income. Sum of lines 7 through 10.

However, even if you are exempt from the City of Portland Part III – Multnomah County Business
Business License Tax, you are still liable for any Heavy
Income Tax
Vehicle Use Tax or Residential Rental Registration fees that
may be due. If you are subject to either tax/fee, please Actual PTI modification election. If the S corporation is
complete line 33 (Heavy Vehicle Use Tax) and/or line 34 electing the ‘actual’ method for allocating the previously
(Residential Rental Registration Fee) and attach the taxed income modification to their shareholders, check this
required schedule(s) with your Business Tax Return. Be box.
sure to include any payment due for these taxes/fees, or Line 12. Multnomah County modifications. Enter any
you will be subject to late payment penalties and interest on modifications to Multnomah County’s adjusted net income
the unpaid balance. here. This would generally apply only in rare circumstances.
Subtract out any non-business income included in adjusted
If you have made estimated prepayments and would like net income (line 11).
them refunded to you or credited to the next tax year, fill out
the prepayment section(s) of the return to tell us how you Line 13. Multnomah County net business income. Sum
of line 11 and line 12.
would like your overpayment applied in Part V – Tax Due /
Refund. Line 14. Owner’s compensation deduction. A deduction
from net business income (line 13) is limited to the lesser of:
Part II – Net Income • The compensation reported on line 9 per owner,
Line 7. Ordinary Net Income or (Loss). Ordinary net • 75% of the amount on line 13, or
income or loss the ordinary business income (loss) • The number of controlling shareholders multiplied
by $150,000 for the County.
reported on form 1120-S. Enter the amount from federal
Form 1120-S, line 22. No deduction is allowed if line 13 is a loss.
Line 8. Taxes based on or measured by net income add- Line 15. Multnomah County subject net income. Sum of
back. Add back any taxes based on or measured by net line 13 and line 14.
income, including the City of Portland Business License
Line 16. Multnomah County apportioned net income.
Tax, Multnomah County Business Income Tax, and Metro
Line 15 multiplied by line 3.
Business Income Tax, that have been deducted to arrive at
the net income reported on line 7. Line 17. Add-back of non-business income allocated to
Multnomah County. Return any non-business income or
Line 9. Owner’s compensation add-back. Enter the
loss removed above on line 12 that should be allocated to
number of controlling shareholders. Enter any Multnomah County.
compensation paid to controlling shareholders (individuals
or families who together hold more than 5% of the stock). Line 18. Total business income taxable to Multnomah
This includes wages, commissions, and salaries (current County. Sum of line 16 and line 17.
and deferred). Line 19. Net operating loss deduction. Enter your net
operating loss (NOL) from previous years as a negative
See Business Tax Administrative Rule (BTAR) 600-93.9A
number here. NOLs are allowed only if reported on prior
Definition of Controlling Shareholders and Calculation of
Business Tax Returns. This deduction cannot be greater
Number of Controlling Shareholders for additional
guidance.

Page 5 of 7, SC-2023 Instructions (Rev. 01/29/2024)

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than 75% of line 18. Any unused NOL may only be carried Do not claim any credit if you did not apply and receive an
forward for five years. approval letter from the Revenue Division.
Line 20. Income subject to tax. Sum of line 18 and line 19. Line 33. Heavy Vehicle Use Tax (HVT). If you are subject
to Portland’s Heavy Vehicle Use Tax, enter the amount from
Line 21. Multnomah County Business Income Tax. Line
line 4 of the HVT Schedule here.
20 multiplied by the tax rate of 2%. The minimum amount of
tax owed is $100. Line 34. Residential Rental Registration Fee. If you are
subject to Portland’s Residential Registration Fee, enter the
Part IV – City of Portland Business License amount due from the Schedule R here.
Tax
Line 35. Total of City of Portland taxes and fees. Sum of
Line 22. City of Portland modifications. Enter any lines 31 through 34.
modifications to City of Portland’s adjusted net income here.
This would generally apply only in rare circumstances. Part V – Tax Due / Refund

Subtract out any non-business income included in adjusted Line 36. Total business taxes and fees. Sum of line 21
net income (line 11). and line 35.
Line 23. City of Portland net business income. Sum of Line 37. Late payment or late filing penalty. Enter the
line 11 and line 22. amount of any late payment of taxes or late filing penalty
Line 24. Owner’s compensation deduction. A deduction owed.
from net business income (line 23) is limited to the lesser of: Line 38. Underpayment penalty. Enter the amount of any
• The compensation reported on line 9 per owner, underpayment penalty owed.
• 75% of the amount on line 23, or Line 39. Interest. Enter any quarterly underpayment
• The number of controlling shareholders multiplied interest and/or interest due on taxes not paid by their due
by $152,500 for the City. dates.
No deduction is allowed if line 23 is a loss. Line 40. Quarterly estimated payments and other
prepayments. Enter the total amount of prepayments as a
Line 25. City of Portland subject net income. Sum of line negative number here. This includes all quarterly estimated
23 and line 24. payments, extension payments, and any credits carried
Line 26. City of Portland apportioned net income. Line forward from prior years.
25 multiplied by line 6. Line 41. Business Retention Credit. Enter the total
Line 27. Add-back of non-business income allocated to amount of Business Retention Credit being claimed on the
City of Portland. Return any non-business income or loss tax return as a negative number here. Please attach Form
removed above on line 22 that should be allocated to the BRC showing your calculations.
City of Portland. Line 42. Overpayment. If the sum of lines 36 through 41 is
Line 28. Total business income taxable to City of negative, this is the amount you have overpaid. If you have
Portland. Sum of line 26 and line 27. an overpayment, you may make an irrevocable choice to
have the balance:
Line 29. Net operating loss deduction. Enter your NOL
from previous years as a negative number here. NOLs are • Refunded to you, or
allowed only if reported on prior Business Tax Returns. This • Applied as an estimated tax payment to the next
deduction cannot be greater than 75% of line 28. Any open tax year.
unused NOL may only be carried forward for five tax years.
If no election is made, any overpayment will be refunded to
Line 30. Income subject to tax. Sum of line 28 and line 29. you.
Line 31. City of Portland Business License Tax. Line 30 Line 43a. Refund. Enter the amount of the overpayment
multiplied by the tax rate of 2.6%. The minimum amount of you would like refunded to you on this line. If you would like
tax owed is $100.
direct deposit of your refund, please file your Business Tax
Line 32. Downtown Business Incentive Credit. Claim Return online at Pro.Portland.gov. If your return is filed on
25% of your total calculated Downtown Business Incentive paper, you will receive your refund in the mail by check. This
Credit on this return. The amount of claimed credit cannot election is irrevocable.
exceed the amount of City of Portland Business License
Tax on line 31.

Page 6 of 7, SC-2023 Instructions (Rev. 01/29/2024)

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Line 43b. Apply as an estimated tax payment. Enter the
Appendix
amount of the overpayment you would like to apply as an
estimated payment to the next open tax year on this line. Exemption Codes
This election is irrevocable.
If you are claiming an exemption from the City of Portland
Line 44. Combined amount due with report. If the sum of
Business License Tax and/or Multnomah County Business
lines 36 through 41 is positive, you have a balance due.
Income Tax, please use one of the following Exemption
Make your check payable to ‘City of Portland’ and submit Codes listed below:
with your Business Tax Return. For fastest payment
processing, pay online by logging into your PRO account at Code Explanation
Pro.Portland.gov. 1 No business activity in jurisdiction
Gross business income from all sources less
Part VI – Signature 2 than $100,000 (Multnomah County Only)
Gross business income from all sources less
Signature. An authorized representative of the business 3 than $50,000 (City of Portland Only)
must sign and date the return and provide a contact email Only business is the operation of less than 10
address and phone number. By signing the return, you 4 residential rentals (Multnomah County Only)
acknowledge, under penalty of false swearing, that the 5 Real estate brokers (City of Portland Only)
information on the return is true, correct, and complete. By 6 Insurance agent
claiming the Downtown Business Incentive (DBI) Credit, 7 PL 86-272
you agree to a waiver of the statute of limitations for any 8 Non-profit under ORS 317.080
year where the credit is claimed, per administrative rule. Trusts exempt from federal income tax under
9 IRC § 501
This waiver will only apply to the DBI Credit and will not
10 Farm/Ag only (HVT still possible)
apply to other tax assessments or refunds.
99 Other (explanation required, please attach)
Preparer Signature. Anyone who prepares, advises, or
assists in preparing business income tax returns in

exchange for compensation of any kind must be licensed to
prepare Oregon returns and must sign the return.

Mailing Instructions

Mail your completed return and all required supporting tax
pages in the same envelope to:
Revenue Division
111 SW Columbia St. Suite 600
Portland, OR 97201-5840

Page 7 of 7, SC-2023 Instructions (Rev. 01/29/2024)

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