State of Oregon: Blue Book Oregon’s Economy: Revenue and Taxes

Because ensuring that all Oregonians have a real opportunity to thrive requires public policy grounded in facts. Though Oregon tax law is no longer explicitly racist, it continues to entrench and even deepen racial disparities that are the result of past and present policy choices. From Jesus to Adam Smith, there is wide agreement that a fair tax system is one based on the ability to pay — one that asks proportionately more of a rich person than of a poor person. Taxes pay to educate our children, to care for our seniors, and for many other services that we alone cannot shoulder. Generally, you can deduct interest paid on first and second mortgages.

• Paper returns for open accounts with a balance due greater than $100 are kept indefinitely.
• If the policy goal of taxing cigarettes is to encourage cessation, vapor taxation must be considered a part of that policy design.
• The rate depends on the tax rate approved by local voters and the limits established by the Oregon Constitution.
• For couples filing taxes together, the 8.75 percent tax rate kicks in at $18,400 of taxable income (what you’re left with after all tax subtractions and deductions, but before tax credits).

The average effective property tax rate is about average, though, ranking as the 26th-highest rate in the country. In the mid-1970s, corporations contributed almost 19 percent of all income taxes collected by the state of Oregon. This relative decline of the corporate income tax has occurred despite an environment of strong corporate profits. To e-file your Oregon and Federal income tax returns, you need a piece of tax software that is certified for eFile by the IRS. While most in-depth tax software charges a fee, there are several free options available through the states, and simple versions are also offered free of charge by most tax software companies. All filers can get their tax using the personal income tax calculator instead of using the tax rate charts or tables in the return instructions.

Total Estimated 2022 Tax Burden

In 1862, not long after joining the Union, Oregon enacted a tax on people of color. If you were Black, mixed-race, Hawaiian, or Chinese, you had to pay a tax not levied on white Oregonians. If you couldn’t afford it, you paid it off by performing road work. If you want to cut taxes in Oregon, a simple majority of the Oregon legislature suffices.

• While the personal income tax is based on a taxpayer’s ability to pay, Oregonians pay other taxes not connected to how much someone can afford to pay.
• Complete an Oregon Business Registry Resale Certificate​ and give it to the out-of-state seller at the time of purchase.
• Taxable property includes real property, mobile homes and some tangible personal property used by business.
• Of all these sources, half of total state revenue is from taxation.

The total tax rate is then multiplied by the assessed value of the property. The county assessor verifies the tax rates and levies submitted by each local taxing district on an annual basis. The county tax collector collects the taxes and distributes the funds to the local districts. Oregon was one of the first Western states to adopt a state income tax, enacting its current tax in 1930.

Oregon Secretary of State

There are 1,200 local taxing districts in Oregon, with property tax rates varying between each one. Tax collections are managed primarily by the 36 counties in Oregon, which assess property and calculate taxes owed. Revenue from the property tax typically goes to support local services such as schools and law enforcement. oregon income tax rate ​In most cases, you must make estimated tax payments if you expect to owe $1,000 or more when you file your Oregon income tax return. For the Single, Married Filing Jointly, Married Filing Separately, and Head of Household filing statuses, the OR tax rates and the number of tax brackets remain the same.

Oregon
doesn’t tax Social Security or Railroad Retirement Board benefits. Sales tax rate differentials can induce consumers to shop across borders or buy products online. If your state tax witholdings are greater then the amount of income tax you owe the state of Oregon, you will receive an income tax refund check from the government to make up the difference. The two most popular tax software packages are H&R Block At Home, sold by the H&R Block tax preparation company, and TurboTax Federal & State, sold by the Intuit software company. Both companies produce multiple editions for simple to very complex tax returns, so be sure to carefully compare the features offered by each package.

3 – Oregon Dependent Deduction

The state and each county assessor determine the value of property in each county. Measure 5, which was passed by the voters in November 1990, restricted non-school taxes on any property to $10 per $1,000 of real market value. It restricted school taxes on any property to $5 per $1,000 of real market value.

• In subsequent tax years, the assessed value is limited to 3% annual growth until it reaches real market value.
• The tax rate is 6.6% on Oregon taxable income of $1 million or less and 7.6% on Oregon taxable income above $1 million.
• For tax year 2020, Oregon residents filed about 2.02 million Oregon personal income tax returns, representing about 2.74 million taxpayers, which includes spouses.
• The only way to stop these new tax breaks is for the Oregon legislature to vote to reject them — to “disconnect” from them.
• Corporations not doing, or that are not authorized to do, business in Oregon, but have income from an Oregon source, pay income tax.
• You can learn more about how the Oregon income tax compares to other states’ income taxes by visiting our map of income taxes by state.

If you’re an Oregon resident and you purchase a new vehicle from a seller outside of the state, you may be exempt from paying the other state’s sales tax. Complete an Oregon Business Registry Resale Certificate​ and give it to the out-of-state seller at the time of purchase. The seller may accept this certificate and exempt the transaction from their state’s sales/use/transaction tax, but they aren’t required to accept it. Policymakers at all levels of government should avoid the pitfalls of incentives. Instead, they should focus on creating a more efficient, neutral, and structurally sound tax code to the benefit of all types of business investment.

Oregon has a graduated individual income tax, with rates ranging from 4.75 percent to 9.90 percent. Oregon has a 6.60 percent to 7.60 percent corporate income tax rate and levies a gross receipts tax. Oregon does not have a state sales tax and does not levy local sales taxes. Oregon’s tax system ranks 24th overall on our 2023 State Business Tax Climate Index.

• Statewide, the average effective property tax rate (annual property taxes as a percentage of home value) is 0.82%.
• The state EV taxation landscape reflects the evolving transportation sector and the pressing need to address both fiscal gaps in road funding and environmental concerns.
• Local governments levy property taxes, and these come in right around U.S. averages.
• The total tax rate on any particular property is calculated by adding all the local taxing district rates in the area.
• Property taxes are the primary tool for financing local governments and generate a significant share of state and local revenues.