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Oregon’s R&D Tax Credit: A Valuable Opportunity for Semiconductor Companies

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In July 2023, Oregon introduced a research and development (R&D) tax credit specifically aimed at supporting the semiconductor industry. Effective January 1, 2024, this incentive is available to qualifying companies conducting semiconductor research within the state and will remain in place through January 1, 2030.

This development marks the return of an R&D credit in Oregon, which has not offered one since the previous version expired in 2017. Now, eligible taxpayers may claim a credit against their personal income or corporate excise taxes for increased qualified research expenses and basic research payments, as defined by federal Internal Revenue Code (IRC) § 41.

Who Qualifies for Oregon’s R&D Tax Credit

To be eligible, the research must be carried out in Oregon by a qualified semiconductor company engaged in semiconductor-related trade or business. The applicable percentage for calculating the credit is 15%, which is slightly lower than the standard 20% provided under IRC § 41(a).

Claiming Oregon’s R&D Tax Credit

The maximum credit that a taxpayer can claim is $4 million. However, the refundable portion of the credit varies depending on the number of employees the taxpayer has in Oregon:

  • For taxpayers with fewer than 150 employees in Oregon, the credit is 75% refundable.
  • For taxpayers with at least 150 employees in Oregon but fewer than 500, the credit is 50% refundable.
  • For taxpayers with at least 500 employees in Oregon but fewer than 3,000, the credit is 25% refundable.

Unused credits can be carried forward until 2029, allowing taxpayers to utilize them in future tax periods.

To claim the credit, eligible taxpayers must submit a one-time registration form, followed by an annual application, to obtain certification from Business Oregon. This ensures that the qualifying research activities meet the necessary criteria for the R&D credit. The 2025 deadline to obtain certification is October 15, 2025.

Ready to Assess Eligibility?

Whether your organization is expanding R&D efforts or looking to offset tax liability, this program offers a meaningful opportunity to reduce costs and reinvest in growth.

If your business operates in the semiconductor space and is conducting research in Oregon, now is the time to assess eligibility. Frazier & Deeter’s tax credit specialists are here to help your company maximize benefits for your investments and innovation.

Contact us today

Contributors

Tommy Zavieh, Partner & National Practice Leader, Credits & Incentives

Sheila R. Anderson, Partner, Credits & Incentives

Allen Tobin, Principal, Credits & Incentives

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