Bottom Line
Middle-Class Families: Not Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Mixed Tax Picture (Go to the Kiplinger Tax Map for Retirees)
Oregon's income tax bite is one of the biggest in the country. The lowest rate is 4.75% and the highest 9.9%. However, the state has a provision called the "kicker" credit: If too much money is collected in a given year, taxpayers will receive a partial refund in the next year.
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Perhaps the best thing about the Beaver State's tax picture is its absence of a sales tax. You can buy anything in the state and never pay a penny in sales taxes. When it comes to property taxes, Oregon's median property tax rate is a little below the national average.
The state also has an estate tax. And it kicks in for estates worth $1 million or more.
Oregon Income Taxes
Oregon Income Tax Range
Low: 4.75% (on up to $3,750 of taxable income for single filers and up to $7,500 for married couples filing jointly)
High: 9.9% (on taxable income over $125,000 for single filers and over $250,000 for married couples filing jointly)
A "kicker" tax credit may be available for the 2023 tax year if actual state revenues exceeded forecasted revenues by 2% or more over the two-year budget cycle (the credit is possible only in odd-numbered years). For example, a credit was available in 2021 equal to 17.341% of 2020 Oregon tax liability before any credits.
Counties and special districts can also impose local income taxes.
Oregon Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
Oregon Tax Breaks for Other Retirement Income
Income from federal government retirement plans for work or points earned before October 1, 1991, is exempt.
In addition, Oregon allows residents to deduct payments from an IRA, Keogh plan, SEP plan, and certain government plans if another state has already taxed contributions to the plan made while the taxpayer was a nonresident.
Taxpayers age 62 and older may also qualify for a tax credit equal to the lesser of their Oregon tax liability or 9% of taxable retirement income, depending on the amount of their household income, Social Security benefits and Railroad Retirement benefits.
Railroad Retirement benefits are fully exempt.
Oregon Sales Tax
No state or local sales tax.
Oregon Real Property Taxes
In Oregon, the median property tax rate is $823 per $100,000 of assessed home value.
Oregon Property Tax Breaks for Retirees
Homeowners 62 and older may delay paying property taxes through the Property Tax Deferral for Disabled and Senior Citizens program. Among other requirements, you must live on the property, have a total household income of less than $51,000 (for 2022), have a net worth of less than $500,000, and your home can't be worth more than $250,000. A claim for an initial year of deferral, or for continued deferral, may not be filed on or after December 2, 2032, and deferral may not be granted for a property tax year beginning after July 1, 2032.
Oregon Motor Fuel Taxes
Gasoline: 40.83¢ per gallon (varies by location).
Diesel: 40.06¢ per gallon (varies by location).
Oregon Sin Taxes
Cigarettes: $3.33 per pack
Cigars: 65% with a cap of $1 per cigar
Moist snuff: $1.78 per ounce with a minimum of $2.14 per unit sold
All other tobacco: 65% of wholesale price
Vapor products: 65% of wholesale price
Beer: $0.08 per gallon
Wine: $0.67 per gallon if up to 16% alcohol by volume, $0.77 per gallon if over 16% but less than 21% alcohol by volume, or $0.75 per gallon if over 21% alcohol by volume
Liquor: $21.95 per gallon (the liquor tax is an estimate by the Distilled Spirits Council of the United States and published by the Tax Foundation)
Marijuana: 17% retail sales tax (some municipalities add 3% tax)
Oregon Estate and Inheritance Taxes
Oregon has an estate tax for estates valued at $1 million or more. Rates range from 10% to 16%.
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