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Changes to Rental Tax on Heavy Equipment Starting January 1, 2019

In 2018, the Oregon Legislature passed HB 4139 to reform taxation of heavy rental equipment. Heavy equipment providers will now be exempt from paying property tax on rental fleets (subject to several exceptions by the Oregon Department of Revenue rules). In exchange, rental companies will now pay a 2% tax on the revenue generated by each rental. Starting in 2019, you will see the 2% tax on invoices when renting from qualified heavy equipment providers.

Why the change?

Locating, assessing, and remitting tax on rental equipment can be difficult given the mobile nature of such fleets. In addition, for equipment that moves from state to state, it can be taxed several times throughout the year. This change will make sure that equipment is only taxed based on its usage and not taxed more than once.

Is this a tax increase?

No, the bill was designed to ensure that the rental providers pay the same amount of tax to the state that they currently pay to local assessors.

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