Oregon
Updates
What You’ll Learn
If you’re a nonprofit in Oregon, or you’re a nonprofit considering fundraising or other activities in Oregon, you must understand the requirements that Oregon has established for nonprofits operating in the state.
How can you become familiar with these laws? Where should you start?
Start here. This state profile includes the basic requirements nonprofits must consider. Reading the profile and implementing appropriate compliance measures will help you prepare your organization for success in Oregon.
Getting to Know the State Nonprofit Corporation Law
Background
*Important primarily for nonprofits incorporated in Oregon
Emma Woodhouse, handsome, clever, and rich, with a comfortable home and happy disposition, seemed to unite some of the best blessings of existence; and had lived nearly twenty-one years in the world with very little to distress or vex her. She was the youngest of the two daughters of a most affectionate, indulgent father; and had, in consequence of her sister’s marriage, been mistress of his house from a very early period. Her mother had died too long ago for her to have more than an indistinct remembrance of her caresses; and her place had been supplied by an excellent woman as governess, who had fallen little short of a mother in affection.
- Emma, Jane Austen
When reading a novel, we get to know a fictional character by the author’s description. The author tells us about the character’s appearance, purpose, actions, mannerisms, and values.
Nonprofit corporations are something like fictional characters.
We learn how a nonprofit will look and act and make decisions not by reading a novel, but by reading the state law (called the nonprofit corporation act) and the rules the nonprofit makes for itself (called the bylaws and articles of incorporation). The law and the organization’s own rules tell us the organization’s name, purpose, way of acting, and method of making decisions.
To get to know your own nonprofit, be sure to review the sections below.
State Nonprofit Corporation Law
Corporate Governance
Conflict Transactions: Or. Rev. Stat. § 65.361; Need to review the basic best practices for conflicted transactions? See Bylaws Module 14: Conflicts of Interest.
Director Standards of Conduct: Or. Rev. Stat. § 65.357; Need a refresher on the role of directors? See Bylaws Module 6: Directors.
Members: Eligibility and Statutory Powers: Or. Rev. Stat. § 65.131, 144; Not sure what a “member” is? Need to review the basics? See Bylaws Module 5: Members.
Indemnification: Or. Rev. Stat. § 65.391; Not sure what “indemnification” is? Need to review the basics? See Bylaws Module 8: Indemnification.
For Religious Nonprofits
Nonprofit Religious Corporation Act: Oregon’s nonprofit corporation law expressly: (a) acknowledges an option for nonprofit corporations to incorporate for religious purposes and (b) includes specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs. The law does not include an option to incorporate expressly as a nonprofit religious corporation. Or. Rev. Stat. § 65.042; Confused about what it means to be a religious nonprofit corporation? See our whitepaper “Why a Religious Corporation?”
Reliance on Religious Guidance in Governance: Oregon law permits a director to rely on guidance from religious figures within his or her faith tradition in the fulfillment of the director’s fiduciary duties. Or. Rev. Stat. § 65.357(d)
Understanding Religious Liberty in this State
Case Study
*Important for all nonprofits doing business in Oregon, whether incorporated in Oregon or elsewhere
The religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.
- Our Lady of Guadalupe School v. Morrisey-Berru, 140 S. Ct. 2049 (2020).
Sometimes, the state or local government (like the city or county) makes laws that could conflict with your organization’s free exercise of religion or its sincerely-held religious beliefs.
For example, a law might require employers not to make faith-based distinctions between job candidates. If your organization’s mission is to pass on the teachings of your faith, you will need to make faith-based distinctions in evaluating candidates because their faith commitments will impact their abilities to partner in your mission and witness the faith to your program participants.
So what do you need to do? Be aware of the laws listed below. If any of the laws impact your organization—for example, if you are an employer or a facility open to the public—learn more about how you can protect yourself by reviewing Napa Legal’s religious liberty resources. Talk to an attorney if you have specific concerns.
Religious Liberty Protections
State Religious Freedom Restoration Act: Oregon has not enacted a RFRA and has enacted nondiscrimination laws that conflict with the beliefs of many religious organizations. Not sure what a “religious freedom restoration act” is? Click here to learn the fundamentals.
State Constitutional Protection of Free Exercise: The Oregon Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment. Or. Const. art I, §§ 3 and 4; art. X, § 2
State Blaine Amendment: Oregon’s Constitution contains a Blaine Amendment that broadly restricts faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Current US Supreme Court precedent has rendered this language ineffective, but it could become effective in the future if Court precedent changes. Or. Const. art I, § 5; Not sure what a Blaine Amendment is? Review the basics here.
Other Relevant State Laws and Regulations
Oregon currently has a broad public accommodation law. Be sure you understand whether this and any local regulations apply to your organization.
Religious Freedom and Public Accommodation Laws: Oregon’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide only narrow accommodations or exemptions to religious organizations, such as organizations classified as churches. Or. Rev. Stat. § 659A.403; Not sure what a public accommodation law is or what it means for your organization’s religious liberty? Learn the basics in this article which discusses the issue in the context of the case Fulton v. City of Philadelphia.
Protections for Religious Exercise in State of Emergency: Oregon law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Key Employment Laws and Regulations
In addition to tracking with the protected classes in the federal anti-discrimination employment law (race, color, religion, sex, and national origin), Title VII of the Civil Rights Act of 1964, Oregon prohibits employers from discriminating on the basis of sexual orientation, marital status, age, and expunged juvenile record. An employer is any person who has one or more employees. No religious exemptions or exclusions apply to this definition and the related requirements. Local governments may also have employment-related regulations. An attorney can help you understand what requirements apply to your organization.
Additionally, Oregon has a paid leave act that may involve additional tax obligations if you have employees in the state. If this applies to you, check out the website for Paid Leave Oregon and consult with your attorney,
Religious Freedom for Faith-Based Employers: Or. Rev. Stat. § 659A.001; Or. Rev. Stat. § 659A.030; Need to review the basics on religious freedom and employment matters? Walk through a self-audit of best practices here.
Religious Freedom for Employees: Or. Rev. Stat. § 659A.030
Conducting Activities or Programs in this State
Understanding the Business Registration Requirement
*Important primarily for nonprofits doing business in Oregon but incorporated elsewhere
This jurisdiction requires foreign nonprofit organizations not eligible for the exemption to register with the secretary of state as a business before the organizations can complete their charitable solictation registration. If you are fundraising or conducting activities in this state, you must consider whether you need to register as a foreign nonprofit corporation. Oregon law requires entities that are transacting business in the state to register. An attorney can help you decide whether you need to register based on the type and volume of activities you have in this state.
Business Registration Statute
Fundraising and Charitable Registration in This State
How to Know (And What to D0) If You're Fundraising In This State
*Important for both Oregon and Foreign Nonprofits
Not sure what “charitable registration” is? Need to review the basics? Read this article for a refresher.
In this state, religious organizations are automatically exempt from charitable registration requirements. The religious exemption is not limited to IRS Form 990 Non-Filers, such as churches. It applies to "any organized church or group organized for the purpose of divine worship, religious teaching, or other directly ancillary purposes." Or. Rev. Stat. § 128.620(5) and Or. Rev. Stat. § 128.640(2)(a)
If You're Fundraising In Multiple States, Make Sure You Understand the URS
In this state, organizations that are required to register have the option of registering through the Unified Registration Statement, which is a standardized charitable registration accepted in many states. Oregon does not currently have an online filing system.
Evaluate Whether You'll Need a Registered Agent
Some states require organizations to appoint a "registered agent" in the state as part of the organization's charitable registration. In Oregon, a registered agent is required to register under the state business registration requirements. Review Or. Rev. Stat. § 65.111 and consult with a lawyer to determine whether your organization is required to have a registered agent in Oregon.
Follow the Rules About Communicating with the Public
This state does not require organizations to post specific language when conducting charitable solicitations unless the organization is working with a professional fundraiser. See Or. Rev. Stat. § 128.824 and 128.801 to 128.898. However, if an organization chooses to state in a solicitation that it is registered with the state attorney general, the organization must also state, immediately following and in equal prominence, that registration does not indicate that the attorney general approves or endorses the organization. See Or. Reg. Stat. 128.891. An out-of-state organization may not use an in-state address in some cases.
Charitable Registration Statute
Charitable Registration Exemption Statute
Annual Report Requirement
Audit Requirements: Oregon does not impose review or audit requirements as a condition of maintaining authorization to fundraise in the state.
Get Acquainted with State and Local Taxes and Exemptions
State and Local Taxes
In this state, most organizations that have received federal income tax exemption under IRC Sec. 501(c)(3) are automatically exempt from state income tax. Some organizations may choose to send a copy of their IRS determination letter to the state department of revenue to indicate the organization's position that it qualifies for the exemption. Although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI will be subject to Oregon’s income tax. If UBTI exceeds $750,000, registration for the unique-to-Oregon Corporate Activity Tax may be required. Oregon also has a unique transit tax that requires additional employer withholding from certain wages of persons who perform services in Oregon, even if the person is not a state resident.
It is also important to consider whether applying for property tax exemption would be appropriate for your organization. More information regarding Oregon property tax exemption is available on the Oregon Department of Revenue webpage and Or. Rev. Stat. § 307.130. As of January 2022, Oregon does not impose a sales and use tax. An accountant or attorney can provide answers to specific questions regarding your organization’s tax obligations and eligibility for exemptions.
Corporate Income Tax Statute
Oregon imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status. Or. Rev. Stat. § 317.018 (excise tax); Or. Rev. Stat. § 317.090 (minimum excise tax); Or. Rev. Stat. § 317.080 (excise tax exemptions); Or. Rev. Stat. § 318.020 (income tax); Or. Rev. Stat. § 318.031 (income tax exemptions tied to excise tax exemptions)
Corporate Gross Receipts Tax: Corporate Activity Tax 317A.100(4)(a), 317A.125
Corporate Franchise Tax Statute
This state does not have a corporate franchise tax.
What You Need to Know About Sales Tax
Sales and Use Tax: Oregon does not impose sales or use tax.
State Tax Treatment of Unrelated Business Income: Or. Rev. Stat. § 317.920
Property Tax: Oregon imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes. Or. Rev. Stat. § 307.140; Application
Oregon Transit Tax: Or. Rev. Stat. § 320.550
State-Specific Special Requirements
Miscellaneous
Useful Links
Reviewed by
Steve Elzinga
Legal Disclaimer
This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.
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**Please note that the following state profiles are forthcoming and will be published soon:Hawaii and Washington