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Like many other states, Oregon has a statute which requires tax withholding in connection with the sale of real estate.1 The escrow agent is responsible for withholding and remitting the required amount to the Oregon Department of Revenue (DOR). Like other states, Oregon has exemptions to the withholding requirement.

Certain exemptions from withholding are based on seller's status and must be demonstrated solely to the escrow agent in its capacity as a statutory authorized agent responsible for withholding. Examples include:

  • An individual who is a resident of Oregon on the closing date;
  • A C corporation registered to do business in Oregon;
  • A pass-through entity such as an LLC or grantor trust reporting income to the DOR, in which case the entity or trust are disregarded; or
  • A governmental instrumentality (such as city, county, state or federal agencies).

Other exemptions must be affirmed by the seller under penalty of perjury on a DOR form2 which must be delivered to the DOR by the escrow agent within 30 days after closing. 

One of the most common exemptions requiring written affirmation by a seller on a DOR form, is the sale of a principal residence where the gain qualifies for exclusion under section 121 of the Internal Revenue Code. 

A seller may complete the DOR form and claim an exemption based on a transfer that qualifies for deferral of gain under Section 1031 of the Internal Revenue Code. If seller receives any funds, referred to as "boot" in the sale of relinquished property under a 1031 exchange, Oregon tax withholding applies to that amount.

Other exemptions indicated on the DOR form are:

  • Total consideration (sale price) is $100,000 or less
  • Sale is under foreclosure, forfeiture, or writ of execution
  • Seller is acting under judicial review (For example, seller may be a court-appointed personal representative, executor, conservator, or bankruptcy trustee.)
  • Transfer is in lieu of foreclosure for no additional monetary consideration paid to seller.
  • Seller is a resident of Arizona, California, Indiana, or Virginia; and expects zero Oregon tax because of credit for taxes paid to seller's home state.

Determining whether an exemption applies may require the seller to obtain advice from a tax professional and may require review of the Internal Revenue Code, Oregon tax statutes, and applicable federal and state regulations and rules. Escrow agents are not qualified to provide tax advice, which is why it is extremely important that sellers are notified of the withholding requirement at the beginning of their transaction. 

When no exemption applies, the seller must identify or calculate the withholding amount, using the DOR form. Required withholding is the lesser of the following: 

  1. Four percent (4%) of the total consideration (sale price)
  2. All of the net sale proceeds
  3. Eight percent (8%) of the taxpayer's gain from the sale (as calculated on the DOR form)

The payment is due to the DOR within 20 days after escrow agent's disbursement of seller's proceeds. An escrow agent must keep all Oregon withholding forms for a period of six years following the closing date. 

There is helpful information on the Oregon Department of Revenue website at: Taxpayers can call 503.378.4988 or 800.356.4222 or email

1See ORS 314.258 and Oregon Administrative Rule 150-314-0040
22021 Form OR-18-WC 

The information provided herein does not, and is not intended to, constitute legal advice; instead, all information, and content, in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. This article contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; Fidelity National Title Group does not recommend or endorse the contents of the third-party sites.  

Article provided by contributing author:
Diana Hoffman, Corporate Escrow Administrator
Fidelity National Title Group
National Escrow Administration 

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