Taxes in Oregon: Features and Advantages

Main Taxes in the State of Oregon

Income Tax:

Oregon levies a progressive personal income tax with one of the highest maximum rates in the U.S. For 2024–2025, rates range from 4.75% to 9.9%, depending on income level.

Additionally, residents of Multnomah County (Portland) pay an extra regional tax of up to 3%. Taxable income includes wages, business income, rental income, capital gains, interest, dividends, and more.

The state does not provide a standard deduction like at the federal level but offers various individual and family deductions.

Sales Tax:

One of Oregon’s key advantages is the complete absence of sales tax at both the state and local levels. This makes shopping in Oregon attractive for consumers and certain types of businesses, particularly retail.

However, companies selling goods or services outside the state (in states with sales tax) may be required to collect and remit sales tax in those jurisdictions.

Our company provides consulting services on economic nexus, registration in other states, sales tax compliance in interstate commerce, and assistance with filing Sales Tax returns in other states if needed.

Property Tax:

Property tax in Oregon is levied at the county and school district levels. The average effective rate is about 1.04% of market value, close to the U.S. average.

Taxation is based on assessed value, limited by state law (Measure 50), which helps restrain tax growth even when market values rise.

Commercial property owners must file annual reports on the value of tangible personal property.

Business Taxes:

Oregon levies a Corporate Income Tax (CIT) for C corporations with progressive rates:

• 6.6% on profits up to $1 million
• 7.6% on profits over $1 million

Since 2020, Oregon also imposes a Corporate Activity Tax (CAT) — a gross receipts tax regardless of profitability. The CAT rate is 0.57% on gross receipts over $1 million plus a fixed $250 fee.

All corporations and LLCs must file an Annual Report with the Oregon Secretary of State. The deadline is annually within the month of the company’s registration date.

Our company provides services for business registration in Oregon, preparing and filing Annual Reports, calculating corporate tax and CAT, structuring LLCs/S Corps with tax implications in mind, and tax planning.

Excise Taxes:

Oregon levies excise taxes on fuel, alcohol, tobacco, cannabis, and certain environmental fees.

Additional taxes apply to heavy vehicles, packaging producers, and electricity distributors.

Estate Tax:

Oregon is one of the few states that still levies a state estate tax. It applies to estates exceeding $1 million, with progressive rates from 10% to 16%.

Favorable Tax Conditions in Oregon:

Despite high personal and corporate tax rates, Oregon offers several significant advantages:

• Complete absence of sales tax, benefiting consumers and retail businesses.
• Limits on property tax growth under Measure 5 and Measure 50.
• High CAT threshold (gross receipts over $1 million) reduces the burden on small businesses.
• Numerous tax incentives for startups, sustainable and eco-friendly industries, agriculture, and IT companies.

Taxes in Oregon Compared to Other States:

The main advantage compared to other states is the absence of sales tax. Personal income tax is among the highest in the country. The Corporate Activity Tax replaces traditional gross receipts taxes and requires careful calculation. Property tax growth is capped but can still be significant in urban counties. Estate tax applies, unlike in most states.