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Unlocking Innovation: How the Research Tax Credit in Oregon Sup
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Oregon has long been a hub of innovation—whether it’s in clean tech, software, advanced manufacturing, or the rapidly growing semiconductor and bioscience industries. But many Oregon companies that invest in research and development (R&D) aren’t fully leveraging one of the most impactful financial tools available: the research tax credit Oregon offers through the federal government—and, when active, through temporary state programs.
If your company is developing new products, processes, or technologies, you may qualify for significant tax incentives. This guide breaks down how businesses in Oregon can benefit from the R&D tax credit and why working with a specialized advisor can make all the difference.
What Is the Research Tax Credit?
The R&D Tax Credit—officially known as the Credit for Increasing Research Activities—is a federal tax incentive that rewards businesses for investing in innovation. It provides a dollar-for-dollar reduction in a company’s federal tax liability, based on qualified research expenses.
In the past, Oregon also offered a state-level R&D credit, although this program has been temporarily inactive since it expired. That said, companies operating in Oregon can still claim federal R&D credits—and these can deliver substantial savings.
Does Oregon Offer a State R&D Credit?
As of now, Oregon does not have an active state-level R&D tax credit. The previous state credit, known as the Oregon Research Tax Credit, expired in recent years and has not yet been renewed.
However, there is ongoing discussion among lawmakers to reinstate or rework the credit, especially given Oregon's importance in the U.S. semiconductor supply chain and innovation economy.
In the meantime, the federal research tax credit remains available and highly valuable to Oregon businesses.
Who Qualifies for the Research Tax Credit in Oregon?
The research tax credit Oregon businesses can claim at the federal level applies to companies of all sizes that conduct qualifying R&D activities within the United States. Eligible industries in Oregon include:
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Semiconductors and electronics
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Clean energy and sustainable tech
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Software development
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Agricultural science and food tech
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Bioscience and medical devices
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Apparel and outdoor product innovation
You don’t need a lab coat or a formal R&D department to qualify. The IRS defines R&D using a four-part test:
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Permitted Purpose – Activities aim to create or improve a product, process, software, or technique.
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Elimination of Uncertainty – You face technical uncertainty about how to achieve your goal.
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Process of Experimentation – You use modeling, prototyping, simulation, or trial-and-error to find a solution.
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Technological in Nature – Activities are based on engineering, computer science, biology, or similar fields.
Which Expenses Are Eligible?
Eligible Qualified Research Expenses (QREs) under the federal credit include:
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Wages for employees directly involved in R&D, including supervisors and support roles
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Supplies used in the development or prototyping phase
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Contract research (generally 65% of the cost qualifies)
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Cloud services or equipment rentals used for development work
The work must be conducted within the U.S., including Oregon, to qualify.
Benefits for Startups and Growing Companies
The federal R&D tax credit isn’t just for large corporations. Thanks to the Payroll Tax Offset provision, qualified small businesses can use up to $500,000 per year of the R&D credit to offset payroll taxes—even if they aren’t yet profitable.
This makes the research tax credit in Oregon especially valuable for early-stage companies and startups focused on scaling.
How to Claim the Credit
Claiming the R&D tax credit involves careful planning and documentation. The steps include:
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Identifying and documenting qualified R&D projects
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Tracking and allocating eligible expenses
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Filing IRS Form 6765 with your federal tax return
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Keeping detailed records in case of audit (including project logs, payroll data, and technical reports)
Many companies either underclaim the credit or avoid it due to the perceived complexity. That’s why working with a tax credit specialist can help ensure compliance while maximizing value.
Why Work with Swanson Reed
Swanson Reed is a global R&D tax consulting firm with extensive experience helping Oregon companies—from startups to multinational corporations—claim the research tax credit effectively.
Their services include:
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R&D eligibility assessments
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Preparation of federal R&D credit claims (Form 6765)
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Technical documentation support
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Audit preparation and defense
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Strategic planning for long-term credit use
Swanson Reed’s team understands the nuances of Oregon’s business landscape and industry-specific requirements, helping clients confidently pursue the credits they’ve earned.
Conclusion
Innovation is alive and well in Oregon—but too many companies are missing out on the opportunity to recoup their R&D investments. Even without an active state credit, the research tax credit Oregon businesses can access at the federal level remains a powerful tool for boosting cash flow, reducing tax liability, and funding continued innovation.
Don’t let complex rules or documentation stand in your way. Partner with Swanson Reed to unlock your R&D credit potential today.
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