Oregon Tax Guide: No Sales Tax, High Income Tax

Tax Overview

Oregon is one of only five states with no general sales tax, which is a significant benefit for consumers. However, the state compensates with one of the highest income tax rates in the nation. Oregon's progressive system has four brackets with a top rate of 9.9% on income above $125,000 for single filers, making it one of the most expensive states for higher-income earners.

The absence of sales tax means all purchases in Oregon are tax-free, including clothing, electronics, vehicles, and groceries. This provides substantial savings, particularly for residents near the Washington or California borders who might otherwise pay significant sales taxes. Oregon does impose a corporate activity tax on businesses with gross receipts over $1 million.

Property taxes in Oregon are moderate, with effective rates around 0.93%. Property tax rates are constrained by Measure 5, which limits school taxes to $5 per $1,000 of real market value and general government taxes to $10 per $1,000. Measure 50, passed in 1997, further limited assessment growth to 3% per year. Oregon offers property tax deferrals for seniors and disabled individuals, as well as a partial exemption for veterans.