Oregon Tax Rates

This post provides an overview of the primary taxes levied at the state level in Oregon. The state is unique for its lack of a general sales tax and reliance on one of the highest top individual income tax rates in the nation. It also has a complex dual system for corporate taxation. For individuals or businesses seeking comprehensive support with tax filings, compliance, or strategic planning, indinero offers expert services. We encourage all who utilize this summary to explore the tailored tax support available through indinero.

Individual Income Tax

Oregon utilizes a progressive state individual income tax system with four tax brackets. The state has one of the highest top marginal rates in the country.

  • State Rates (2025): The rates range from a low of 4.75% to a top marginal rate of 9.90%.
    • The 9.90% rate applies to taxable income exceeding $125,000 for single filers and $250,000 for married couples filing jointly.
  • Local Income Taxes: Residents in the Portland metropolitan area are subject to additional local taxes, such as the Portland Metro Supportive Housing Services Income Tax and the Portland Arts Tax ($35 annual flat fee), further increasing the overall burden for some.
  • Retirement Income: Social Security benefits and Railroad Retirement Board benefits are not taxable in Oregon. Income from pensions, 401(k) withdrawals, and IRAs is generally taxable, but credits or subtractions may be available depending on age and income.

Sales and Use Tax

Oregon is one of only five states that does not impose a general state or local sales tax.

  • State and Local Sales Tax: The general state and local sales tax rate is 0.0%.
  • Specific Taxes: While there is no general sales tax, the state does levy high excise taxes on specific goods and services, including:
    • Cigarettes: $3.33 per 20-pack.
    • Gasoline: 40.00 cents per gallon.
    • Vehicle Taxes: A Vehicle Use Tax on new vehicles purchased in Oregon and a Vehicle Privilege Tax on new vehicles purchased by Oregon residents outside the state.

Property Tax (Ad Valorem Tax)

Property taxes in Oregon are collected at the local level by various taxing bodies, and the system is unique due to two major ballot measures (Measure 5 and Measure 50) that place severe caps on tax growth and total tax rates.

  • Taxable Value Calculation (Measure 50): The tax is based on the Assessed Value (AV), which is the lower of the property’s Real Market Value (RMV) or its Maximum Assessed Value (MAV).
    • The MAV is essentially the property’s 1995 Real Market Value minus 10%, which is then allowed to increase by a maximum of 3% per year.
  • Tax Rate Caps (Measure 5): The total tax rate is capped based on the property’s Real Market Value (RMV):
    • Taxes for Education cannot exceed $5 per $1,000 of RMV.
    • Taxes for General Government purposes cannot exceed $10 per $1,000 of RMV.
  • Effective Rate: These caps keep Oregon’s effective property tax rate relatively low, at approximately 0.78% of owner-occupied housing value.

Corporate and Business Taxes

Oregon utilizes a dual-tax system for corporations, imposing both a traditional income tax and a gross receipts tax.

1. Corporate Excise (Income) Tax

  • Tax Rates: The tax is imposed on corporate net income using a tiered structure:
    • 6.6% on the first $1 million of taxable income.
    • 7.6% on taxable income in excess of $1 million.
  • Minimum Tax: Corporations must pay the greater of the income tax or a minimum tax that is based on the corporation’s Oregon sales, ranging from $150 to $100,000.
  • Pass-Through Entities: Generally, S Corporations and LLCs are largely shielded from this tax, though they may still be subject to a $150 minimum excise tax.

2. Corporate Activity Tax (CAT)

  • Tax Base: This is a gross receipts tax levied on a business’s Oregon Commercial Activity.
  • Tax Rate: The tax is computed as $250 plus 0.57% (0.0057) of taxable Oregon commercial activity over the $1 million threshold.
  • Thresholds: Businesses with less than $750,000 in Oregon Commercial Activity are excluded from all CAT requirements.

Unique and Miscellaneous Taxes

  • Estate Tax: Oregon is one of the few states that imposes a state estate tax. The exemption threshold is low, starting at $1 million (the lowest in the nation among states that levy an estate tax), and rates can be as high as 16%.
  • “Kicker” Tax Rebate: Oregon has a unique “kicker” law that requires the state to issue a tax rebate to taxpayers if actual state revenue exceeds the official forecast by at least 2% over a two-year budget period.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.