Oregon has one of the highest state income tax rates at 9.9%, but no sales tax. Here’s your complete guide to Oregon taxes.
For residents of the Beaver State, understanding how these tradeoffs affect your bottom line is crucial. While Oregon’s top marginal rate ranks among the highest per our national comparison, the absence of sales tax creates real savings for families who spend heavily on taxable goods. Add in moderate property taxes and strategic planning opportunities, and Oregon’s overall tax burden lands solidly in the middle tier nationally.
Oregon Tax Overview
| Tax Type | Rate | Notes |
|---|---|---|
| Income Tax | 4.75%-9.9% | Progressive brackets |
| Sales Tax | 0% | None — one of 5 states |
| Property Tax | 0.93% avg | Below national average |
| Gas Tax | $0.40/gallon | High |
Oregon Income Tax Brackets 2026
Oregon uses a progressive tax system with four brackets—similar to the federal income tax brackets but with different thresholds and rates. Unlike states like Idaho that have moved to flat taxes, Oregon maintains this graduated structure that taxes higher income at progressively higher rates.
Single Filers
| Taxable Income | Tax Rate |
|---|---|
| $0 - $4,050 | 4.75% |
| $4,050 - $10,200 | 6.75% |
| $10,200 - $125,000 | 8.75% |
| Over $125,000 | 9.9% |
Married Filing Jointly
| Taxable Income | Tax Rate |
|---|---|
| $0 - $8,100 | 4.75% |
| $8,100 - $20,400 | 6.75% |
| $20,400 - $250,000 | 8.75% |
| Over $250,000 | 9.9% |
Oregon Tax Calculator
| Salary (Single) | OR Tax | Effective Rate |
|---|---|---|
| $50,000 | $3,700 | 7.4% |
| $75,000 | $5,900 | 7.9% |
| $100,000 | $8,100 | 8.1% |
| $125,000 | $10,300 | 8.2% |
| $150,000 | $12,775 | 8.5% |
| $200,000 | $17,725 | 8.9% |
| $300,000 | $27,625 | 9.2% |
No Sales Tax Offset
Oregon’s lack of sales tax provides significant savings. This is Oregon’s ace card—especially if you make large purchases like vehicles, furniture, or appliances. While neighboring states like Washington charge up to 10.4% combined state and local sales tax, Oregonians keep that money in their pockets. This particularly benefits retirees and families with high consumption levels, partially offsetting what would otherwise be a steep income tax bill.
| Annual Spending | Typical Sales Tax (7%) | Oregon Savings |
|---|---|---|
| $30,000 | $2,100 | +$2,100 |
| $50,000 | $3,500 | +$3,500 |
| $75,000 | $5,250 | +$5,250 |
| $100,000 | $7,000 | +$7,000 |
High spenders benefit more from no sales tax. For context, a family earning $100,000 who spends $50,000 annually on taxable goods would save $3,500 in sales tax—making their effective state tax burden much closer to a mid-tier state despite the high income tax rate.
Oregon vs. Neighboring States
Oregon’s tax structure creates interesting dynamics compared to its Pacific Northwest neighbors. Understanding these differences is essential for anyone considering a move—or those living near state borders who can strategically plan purchases and income. Check our cost of living by state comparison for the complete picture beyond just taxes.
| State | Income Tax | Sales Tax | Property Tax |
|---|---|---|---|
| Oregon | 9.9% max | 0% | 0.93% |
| Washington | 0% | 10.4% max | 1.03% |
| California | 13.3% max | 7.25%+ | 0.73% |
| Idaho | 5.8% flat | 6% | 0.67% |
| Nevada | 0% | 8.23% | 0.60% |
Oregon vs. Washington Strategy
Living in Washington, working in Oregon: Pay Washington sales tax (high) but no Oregon income tax (for WA residents).
Living in Oregon, shopping in WA: Pay Oregon income tax but can shop in WA to avoid sales tax (though no sales tax in OR anyway).
Living in Oregon: No sales tax advantage for big purchases.
Oregon Standard and Itemized Deductions
Here’s where Oregon gets interesting for tax planning. The state standard deduction is surprisingly low compared to federal levels, which means many Oregonians benefit from itemizing even when they take the federal standard deduction. If you own a home with a mortgage or make significant charitable contributions, run the numbers both ways.
Standard Deduction (2026)
| Filing Status | Amount |
|---|---|
| Single | $2,605 |
| Married Filing Jointly | $5,210 |
| Head of Household | $4,195 |
Oregon’s standard deduction is much lower than federal, making itemizing more common.
Oregon Itemized Deductions
Oregon allows many federal itemized deductions with some modifications:
| Deduction | Oregon Treatment |
|---|---|
| Federal income tax paid | Up to $7,250 deductible |
| State/local taxes | Not deductible |
| Mortgage interest | Deductible (with limits) |
| Charitable contributions | Deductible |
| Medical expenses | Deductible (3% AGI floor) |
The federal tax deduction is unique to Oregon and helps offset high income taxes. This is a genuine planning opportunity—Oregon is one of only a handful of states that let you deduct what you paid to the IRS. High-income taxpayers who pay $7,250+ in federal tax should always claim this deduction.
Oregon Tax Credits
| Credit | Amount |
|---|---|
| Personal exemption credit | $219/person |
| Working Family Household Credit | Up to $8,000+ |
| Child & Dependent Care Credit | Up to $600 |
| Political Contribution Credit | Up to $100 |
| Retirement savings credit | Up to $750 |
Working Family Household Credit
Oregon’s EITC equivalent provides substantial credits for low-income workers:
- Up to 12% of federal EITC
- Refundable credit
- Can receive over $8,000
Oregon Property Tax
| County | Effective Rate | On $500K Home |
|---|---|---|
| Multnomah (Portland) | 1.07% | $5,350/year |
| Washington (suburbs) | 0.96% | $4,800/year |
| Clackamas | 0.99% | $4,950/year |
| Lane (Eugene) | 1.05% | $5,250/year |
| Marion (Salem) | 1.02% | $5,100/year |
Oregon property taxes are capped at 1.5% of assessed value and increases limited to 3% annually.
Metro Portland Taxes
Preschool For All Tax (Multnomah County):
- 1.5% on income over $125K (single) / $200K (joint)
- Additional 1.5% on income over $250K (single) / $400K (joint)
Metro Supportive Housing Tax:
- 1% on income over $125K (single) / $200K (joint)
Combined, Portland-area high earners can pay up to 12.4% in state/local income tax.
Oregon Transit Taxes
| Tax | Rate | Who Pays |
|---|---|---|
| TriMet Transit Tax | 0.8037% | Portland metro workers |
| Lane Transit District | 0.79% | Lane County workers |
| Statewide Transit Tax | 0.1% | All employees |
These are employer-withheld payroll taxes.
Oregon Capital Gains Tax
Oregon taxes capital gains as ordinary income — up to 9.9%. No special long-term rate. This is a significant consideration for investors and business owners planning exits. Unlike the federal system that caps long-term capital gains tax at 20% for most taxpayers, Oregon taxes your stock sales, real estate gains, and business sales at the same rate as your salary.
| Gain Amount | OR Tax | vs. CA | vs. WA |
|---|---|---|---|
| $100,000 | $9,900 | $13,300 | $7,000 (7% LTCG) |
| $250,000 | $24,750 | $33,250 | $17,500 |
Washington’s new 7% capital gains tax applies over $262,000.
Retirement Income in Oregon
Oregon offers a mixed bag for retirees. Social Security benefits are exempt from state tax for most recipients (with some income limits), and military pensions are fully exempt. However, 401(k) and IRA withdrawals—which make up the bulk of retirement income for many—are fully taxable. If you’re approaching retirement, consider Roth conversions now to shift future retirement income to tax-free status. See our 401(k) contribution limits guide for strategies to minimize your future Oregon tax burden.
| Income Type | State Tax |
|---|---|
| Social Security | Not taxed (under income limits) |
| Federal pensions | Taxable |
| State/local pensions | Taxable |
| 401(k)/IRA | Taxable |
| Military pension | Exempt |
Oregon offers a small pension subtraction for those 62+ with modest income.
Filing Oregon Taxes
| Form | Who Files |
|---|---|
| Form 40 | Full-year residents |
| Form 40N | Nonresidents |
| Form 40P | Part-year residents |
Oregon Filing Deadline
April 15 (or next business day) — same as federal.
Tax Planning Tips for Oregonians
- Use federal tax deduction — Oregon allows up to $7,250
- Itemize if possible — Low standard deduction makes itemizing valuable
- Time income around Portland taxes — High earners in Multnomah County face extra taxes
- Consider municipal income timing — Portland preschool tax hits over $125K
- Shop carefully — No sales tax, but cross-border states may charge you
- Max retirement accounts — Reduces taxable income at 8.75-9.9%
Oregon Income Tax Worked Example
$80,000 salary, single filer, standard deduction, living in Portland:
| Amount | |
|---|---|
| Gross income | $80,000 |
| Oregon standard deduction | -$2,420 |
| Oregon taxable income | $77,580 |
| State income tax | ~$6,414 |
| Metro Supportive Housing tax (1%) | $800 (income over $125K — N/A) |
| Portland Clean Energy Surcharge | $0 (income under $125K) |
| Total Oregon state tax | $6,414 |
| State effective rate | 8.0% |
For comparison, a similarly paid worker in neighboring Washington State (no income tax) saves that entire $6,414 each year — a key reason why Portland-area workers sometimes commute from across the Columbia River.
Oregon vs. California: Tax Comparison
| Factor | Oregon | California |
|---|---|---|
| Top income tax rate | 9.9% | 13.3% |
| Sales tax | 0% | 7.25%+ |
| Property tax | 0.93% | 0.73% |
| Overall burden rank | 31 | 48 |
Oregon is more tax-friendly than California, primarily due to no sales tax.
Bottom Line
Oregon’s 9.9% top income tax rate is among the highest in the US, but the lack of sales tax provides meaningful offset, especially for high spenders. High earners in Portland face additional 2.5%+ local taxes. Overall, Oregon ranks #31 for tax burden — middle of the pack.
Best for: Moderate spenders who avoid Portland’s extra taxes, retirees with Social Security income, military families, and those making large taxable purchases.
Less ideal for: High earners in Multnomah County facing the combined 12.4% rate, investors with significant capital gains, or those with substantial 401(k)/IRA withdrawals in retirement.
For a complete picture of how Oregon compares, see our state income tax rates comparison and consider the cost of living factors that go beyond taxation.
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