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The Oregon Research & Development Tax Credit for Semiconductors (ORS 315.518) incentivizes qualified semiconductor companies to invest in innovative research activities within the state, providing a partial offset to personal income or corporate excise tax liabilities through the Oregon Department of Revenue and Business Oregon. Available for tax years beginning on or after January 1, 2024, and sunsetting after December 31, 2029, this credit targets increases in qualified research expenses directly related to semiconductors.
Credits are available to qualified semiconductor companies performing eligible research in Oregon. A "qualified semiconductor company" is defined under ORS 315.518(1) as an entity whose primary business involves the research, design, development, fabrication, assembly, testing, packaging, or validation of semiconductors, or the creation of semiconductor manufacturing equipment, core intellectual property, or electronic design automation software primarily for the semiconductor industry. Activities must support a trade or business directly related to semiconductors and meet federal IRC §41 standards for qualified research.
Not all tech or manufacturing qualifies; focus is strictly on semiconductors. Use our tool to assess your projects.
Oregon follows the federal calculation under IRC §41, with modifications: 15% rate for the regular method (or federal ASC rates if elected), Oregon-sourced QREs only, and semiconductors limitation. "Gross receipts" in IRC §41 means Oregon sales factor (ORS 314.665). Credits are certified annually by Business Oregon before claiming on your tax return (Schedule OR-RESEARCH).
Oregon's semiconductor R&D credit features targeted provisions to support the state's chip industry hub, with strict certification and caps to manage high demand ($40.3M certified in 2025 across 33 taxpayers).
A Portland-based chip design firm leveraged the credit for process improvements:
The Oregon Research & Development Tax Credit for Semiconductors (ORS 315.518) provides a 15% credit on excess qualified research expenses for semiconductor-related activities in Oregon, plus credit on basic research payments under IRC §41(e). Administered by Business Oregon, it's partially refundable (tiered by employee count per ORS 315.519) and capped at $4M per taxpayer through 2029.
Qualifying activities must involve technological uncertainty in semiconductor design, fabrication, testing, or IP development, meeting IRC §41 four-part test (e.g., new chip processes). Excludes routine engineering; Strike Tax reviews projects for compliance.
For $10M in excess QREs, you could claim up to $1.5M (capped at $4M), plus federal credits. Firms with <150 Oregon employees access up to 75% refunds. Use Strike Tax’s calculator for personalized estimates.
Partially refundable for companies with ≤2,999 Oregon employees: 75% if <150, 50% if 150–499, 25% if 500–2,999 (ORS 315.519). Offsets liability and corporate minimum tax; excess as cash refund. Larger firms get nonrefundable credits carryforward for 5 years. Strike Tax optimizes elections.
Submit annual certification application to Business Oregon by October 15 (e.g., 2025 deadline closed), including $3,000 fee, eligibility narrative, and QRE estimates. Claim certified amount on Form OR-20 (corps) or OR-40 (individuals). Strike Tax handles documentation.
Yes, stack the state credit with federal 20% for the same Oregon QREs, maximizing savings. No double-dipping on bases; Strike Tax coordinates claims for compliance.
2025 cap rose to $38.25M statewide (from $35M in 2024); fee increased to $3,000. Application emphasized actual prior-year data for accuracy. Biennium total $80M through 2027; certifications hit near-cap at $40.3M.
Yes; elect ASC per OAR 150-315-0195 on Schedule OR-RESEARCH for 14% (or 6% if no prior QREs) on excess over 50% of 3-year average. Irrevocable without approval. Strike Tax models both methods.
Under regular method: 3% fixed-base for first 5 years, phasing to historical % per IRC §41, using Oregon sales. For ASC: 50% of 3-year prior QRE average. Strike Tax reconstructs bases from records.
Contemporaneous records: payroll logs, project descriptions, invoices for supplies/contracts. Retain 4 years; align with certification narratives. Strike Tax prepares audit defenses.
Use our calculator to estimate your potential federal and state benefits.
Schedule a consultation to certify your semiconductor research activities.
Connect with us to find out how R&D tax credits can boost your organization’s bottom line.
To get an estimate of the potential value of your unclaimed R&D Tax Credits, try out our credit calculator.
Download our R&D Tax Credit Calculator for Android to see how much you can receive from your qualified R&D tax credit expenses.
The Oregon Research & Development Tax Credit for Semiconductors (ORS 315.518) provides a 15% credit on excess qualified research expenses for semiconductor-related activities in Oregon, plus credit on basic research payments under IRC §41(e). Administered by Business Oregon, it's partially refundable (tiered by employee count per ORS 315.519) and capped at $4M per taxpayer through 2029.
Qualifying activities must involve technological uncertainty in semiconductor design, fabrication, testing, or IP development, meeting IRC §41 four-part test (e.g., new chip processes). Excludes routine engineering; Strike Tax reviews projects for compliance.
For $10M in excess QREs, you could claim up to $1.5M (capped at $4M), plus federal credits. Firms with <150 Oregon employees access up to 75% refunds. Use Strike Tax’s calculator for personalized estimates.
Partially refundable for companies with ≤2,999 Oregon employees: 75% if <150, 50% if 150–499, 25% if 500–2,999 (ORS 315.519). Offsets liability and corporate minimum tax; excess as cash refund. Larger firms get nonrefundable credits carryforward for 5 years. Strike Tax optimizes elections.
Submit annual certification application to Business Oregon by October 15 (e.g., 2025 deadline closed), including $3,000 fee, eligibility narrative, and QRE estimates. Claim certified amount on Form OR-20 (corps) or OR-40 (individuals). Strike Tax handles documentation.
Yes, stack the state credit with federal 20% for the same Oregon QREs, maximizing savings. No double-dipping on bases; Strike Tax coordinates claims for compliance.
2025 cap rose to $38.25M statewide (from $35M in 2024); fee increased to $3,000. Application emphasized actual prior-year data for accuracy. Biennium total $80M through 2027; certifications hit near-cap at $40.3M.
Yes; elect ASC per OAR 150-315-0195 on Schedule OR-RESEARCH for 14% (or 6% if no prior QREs) on excess over 50% of 3-year average. Irrevocable without approval. Strike Tax models both methods.
Under regular method: 3% fixed-base for first 5 years, phasing to historical % per IRC §41, using Oregon sales. For ASC: 50% of 3-year prior QRE average. Strike Tax reconstructs bases from records.
Contemporaneous records: payroll logs, project descriptions, invoices for supplies/contracts. Retain 4 years; align with certification narratives. Strike Tax prepares audit defenses.
