There is a myth floating around Portland coffee shops and co-working spaces. It goes something like this:

“If you are a small freelancer or just have a side hustle, the City of Portland doesn’t care about you.”

This myth is dangerous. While it is true that many small businesses are exempt from paying the tax, almost no one is exempt from telling the City they exist.

If you earned money working for yourself in 2025, you need to understand the $50,000 Gross Receipts Exemption. Misunderstanding this rule is the fastest way to get a “Non-Compliance” letter in your mailbox.

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TL;DR: The “Am I Exempt?” Checklist

If your 2025 Gross Receipts were…	Do you have to Register?	Do you have to File?	Do you have to Pay?
**Under $50,000**	YES	YES (Exemption Request)	NO ($0 due)
Over $50,000	YES	YES (Full Return)	YES (Tax due)

• Key Definition: “Gross Receipts” means Total Sales before any expenses.
• The Trap: If you sold $60,000 worth of services but had $20,000 in expenses (Profit = $40,000), you are NOT exempt. You crossed the $50k gross line.

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1. The Rule: Gross vs. Net Income

This is where 90% of business owners get tripped up.

The City of Portland and Multnomah County set their exemption threshold at $50,000 in annual Gross Receipts.

• Gross Receipts: The total amount of money that hit your bank account from clients.
• Net Income: What you keep after expenses.

The Scenario:

You are a graphic designer. In 2025, you billed clients $55,000.

You spent $10,000 on software, a new laptop, and home office costs.

Your Net Profit (what you pay IRS taxes on) is $45,000.

• IRS Status: You are taxed on $45k.
• Portland Status: You are NOT EXEMPT. Because your Gross ($55k) was over the $50k line, you must file a full return and pay the business tax, even though your profit was under $50k.

2. City vs. County: The Double Whammy

Remember, when you file on Portland Revenue Online (PRO), you are usually filing for two jurisdictions at once:

1. City of Portland
2. Multnomah County

While they usually mirror each other, there are times when their thresholds differ slightly depending on where you are located.

• The Safe Bet: If your total revenue from all sources is under $50,000, you are generally safe to claim the exemption for both.
• The “Multnomah Only” Business: If you live in Gresham (Multnomah County) but outside Portland city limits, and you never do business inside Portland, you might only owe the County tax. The $50k gross rule still applies.

3. “I Live in Beaverton. Do I Get an Exemption?”

Geographic location adds another layer of complexity.

If you are based outside the city (e.g., Beaverton, Tigard, Vancouver) but you do business in Portland, you are subject to the tax.

• However: The $50,000 exemption is based on your Total Gross Receipts from ALL sources, not just your Portland sales.

Example:

You are a construction contractor based in Beaverton. You did $200,000 in total revenue. Only $10,000 of that was from a job in Portland.

• Are you Exempt? NO. Your total business revenue ($200k) is above the $50k threshold.
• What do you pay? You will file a return, but you will Apportion (split) your income. You will likely only pay tax on the portion of net income related to that $10,000 Portland job.
• Note: You cannot just ignore the filing because the Portland job was small.

4. How to Claim the Exemption (Don’t Ghost the City)

If you determine you are exempt (e.g., you made $30,000 total), you cannot simply do nothing.

1. Register: You must have a PRO account. (See my guide on How to Register).
2. Log In: Go to your PRO dashboard.
3. File: When tax season comes (due April 15), select “File Return.”
4. Check the Box: There will be a specific question: “Did you have less than $50,000 in Gross Receipts?”
5. Submit: Check “Yes,” sign it, and submit. Your tax due will be $0.

If you don’t do this: The City assumes you are a non-filer. They may estimate your income (often incorrectly high) and send you a bill for taxes + penalties.

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Frequently Asked Questions

Does this apply to Uber/Lyft drivers?

Yes. Ride-share driving is a business. If your total gross fares (before Uber takes their cut) + any other business income is >$50k, you must file. Note: Uber often handles some regulatory fees, but not your Business Income Tax.

What about rental properties?

Yes. If you own a rental property in Portland, the rent you collect counts as “Gross Receipts.” If you collect $2,500/mo ($30,000/year), you are under the limit, but you still must register the rental activity.

I missed filing for 2023 and 2024. What do I do?

If you were exempt in those years (made <$50k), file the late returns now! There is typically no penalty for filing a late return if no tax was owed. You just need to clear your record.

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Confusion is Expensive.

The difference between “Gross” and “Net” can cost you thousands in penalties if you get it wrong.

If you aren’t sure if you crossed the $50k line, or if you need to back-file exemption requests for previous years, Bridgetown Bookkeeping can help. We review your bank feeds, calculate your true Gross Receipts, and handle the PRO filing for you.