Oregon voters reject Measure 120; the transit tax stays at 0.1%
A ballot measure referred by Initiative Petition 302 failed at the May primary. The Department of Revenue told employers to keep withholding one-tenth of 1 percent, uncapped.
Oregon’s statewide transit tax survives 2026 unchanged. Measure 120, which put parts of HB 3991 to voters after Initiative Petition 302 was certified on December 30, 2025, did not pass at the May 19, 2026, primary election.
The Department of Revenue’s instruction to employers is a single sentence: “Please continue to withhold at the rate of one-tenth of 1 percent or .001.”
That rate is small but unusual in one respect — it has no wage cap at all. Where Paid Leave Oregon stops at $184,500 of wages, the transit tax applies to every dollar. On a $75,000 salary it is $75 a year; on $300,000 it is $300.
It has applied since July 1, 2018, under ORS 320.550, to the wages of Oregon residents wherever they work and to non-residents for work performed in Oregon. It is separate from the TriMet and Lane transit payroll taxes, which fall on the employer rather than the employee, and self-employment income is not subject to it.
Combined with the 0.6% employee share of Paid Leave Oregon, Oregonians lose 0.7% of a normal salary to payroll levies before income tax is counted at all.
Source:Oregon Department of Revenue