Tax in Oregon: a complete guide
This article will tell you everything you need to know about taxes in the state of Oregon.
Summary
Oregon has a graduated state income tax system, ranging between 4.75% and 9.90%.
Oregon is one of five states that does not impose sales and use taxes.
Oregon does impose estate and inheritance taxes in the form of a transfer tax.
A financial advisor can help you handle all your tax queries and ensure you’re not paying more tax than needed.
What is Oregon’s tax liability?
Oregon is an interesting tax when it comes to your tax liability.
While the state is one of only five in the US not to impose sales and use taxes, the state makes up for this by charging higher tax rates in other areas, such as higher-than-average property taxes and imposing estate taxes.
Like federal tax returns, Oregon residents must file their state tax returns by the April 15 deadline. Filing opens on January 29.
How much is income tax in Oregon?
Oregon has a graduated state income tax system. The rates range between 4.75% and 9.90%, with the tax you pay based on your taxable income.
These ranges are broken down as follows for single filers:
| Oregon taxable income | Tax rate |
|---|---|
| $0 – $4,050 | 4.75% |
| $4,501 – $10,200 | 6.75% |
| $10,201 – $125,000 | 8.75% |
For those who are married and filing jointly, the ranges are as follows:
| Oregon taxable income | Tax rate |
|---|---|
| $0 – $8,100 | 4.75% |
| $8,101 – $20,400 | 6.75% |
| $20,401 – $250,000 | 8.75% |
| $250,001 and over | 9.90% |
It’s also important to note local jurisdictions in Oregon may also collect local income taxes.
Oregon also has a 6.90% to 7.60% corporate income tax rate.
If compiling and filing your taxes is an area you struggle with, a financial advisor can help. They can take a deep dive into your finances and develop a tax strategy that meets your needs and could reduce your tax liability and save you money. Find a financial advisor with Unbiased today.
What is the sales tax in Oregon?
Oregon is one of a handful of states in the US that does not have a general sales tax or use tax.
Local jurisdictions or municipalities also do not levy a local sales tax.
One exception to this is for new vehicles purchased outside the state. Here, tax must be paid before the vehicle can be registered in Oregon.
Instead of sales and use tax, the Oregon legislature generates revenue through higher income and property taxes.
How much is property tax in Oregon?
According to 2021 data from the U.S. Census Bureau, the average American household spends $2,690 on real estate property taxes.
As mentioned, property tax is an important source of revenue for the state.
In Oregon, the effective property tax rate is 0.93%, with households paying a median annual property tax of $3,351, according to Business Insider.
This amount can be higher or lower depending on where you live in the state.
Similar to other states, Oregon property taxes are assessed, calculated, and collected on a county level.
How much is motor tax in Oregon?
As mentioned, despite not having a sales or use tax, Oregon levies a vehicle use tax for all new vehicles purchased outside the state.
When purchasing a vehicle, you must also factor in the fuel cost, which is influenced by tax.
Oregon does impose a fuel tax, with use fuel coming in at $0.40 per gallon, effective January 1, 2024.
Use fuel is described as “ premium diesel, biodiesel, and any fuel other than gasoline used to propel a motor vehicle on public roads.”
What are the Oregon estate tax rates?
Oregon does impose estate and inheritance taxes in the form of a transfer tax.
Oregon estate tax is tiered, with the tax rate increasing in line with the estate's value.
There is also a $1 million tax exemption, meaning you can subject $1 million from your estate's taxable value before paying taxes. It also means estates valued at $1 million or below will not pay taxes.
Here is a breakdown of the tiers:
| Estate value | Tax rate |
|---|---|
| Up to $1 million | 0% |
| $1 million - $1.5 million | 10% |
| $1.5 million - $2.5 million | 10.25% |
| $2.5 million - $3.5 million | 10.50% |
| $3.5 million - $4.5 million | 11% |
| $4.5 million - $5.5 million | 11.50% |
| $5.5 million - $6.5 million | 12% |
| $6.5 million - $7.5 million | 13% |
| $7.5 million - $8.5 million | 14% |
| $8.5 million - $9.5 million | 15% |
| Over $9.5 million | 16% |
Estate tax is imposed when assets are transferred from an estate to heirs and beneficiaries.
The purpose and filing requirements for both taxes are the same. However, if the estate owner's death occurred before January 1, 2012, heirs must complete an “Inheritance Tax Return.”
If the death occurred after this date, they must complete an “Estate Tax Transfer Return.”
It’s also important to remember federal estate tax also applies if your estate is above a certain threshold ($13.61 million in 2024 for individuals).
How does Oregon tax your retirement income?
Oregon is considered relatively tax-friendly when it comes to retirees.
While Oregon taxes retirement income from savings accounts such as your 401(k) and IRA plans, it does not tax income from Social Security.
Income from retirement plans is calculated on the state income tax system.
The lack of sales and use taxes is also beneficial to retirees, who can see savings here.
While the state does boast a range of benefits for potential retirees, from a mild climate to picturesque scenery and outdoor activity opportunities, a higher cost of living is something potential retirees need to be prepared for.
Get expert financial advice
For further tax guidance and to ensure you’re not paying more tax than you need to, it’s wise to speak to an expert.
A financial advisor can help you handle all your tax queries and ensure you’re not paying more tax than needed.
At Unbiased, we match you with a financial advisor perfectly suited to meet your needs. Simply answer a few questions, and we will look after the rest. Better still, your first consultation is absolutely free.
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Senior Content Writer
Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.