Oregon generally starts with federal taxable income (or federally defined income) and then applies a set of state-specific modifications under Oregon law. Common subtractions include Social Security and Tier I oregon income tax rate Railroad Retirement benefits, interest and dividends from U.S. government obligations, and  in limited cases, certain types of pension or retirement income. Other adjustments may apply depending on income levels, filing status and the type of income. In this guide, we’ll explore key components of The Beaver State’s tax system, from income and sales taxes to property taxes and retirement benefits.

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• It consists of four income tax brackets, with rates increasing from 4.75% to a top rate of 9.9%.
• Gift taxes aren’t owed until the amounts in excess of the annual exclusion total more than the giver’s lifetime gift and estate tax exemption amount (which in 2026 is $15 million).
• You could consider it a bit of a tradeoff, though, since Oregon’s income tax rates are among the highest in the country.
• Roughly 53% of land in the state is managed by the federal government.
• Those who don’t file by the deadline could face a penalty and may need to request an extension.
• Democrats hold 18 of 30 seats in the state Senate and 37 of 60 in the state House, an increase since 2025 after Tillamook Rep. Cyrus Javadi switched parties from Republican to Democrat.
• Department of Labor and has established guidelines to comply with the federal rules and the new Oregon law.

At a minimum, the new taxes can be confusing and time-consuming for taxpayers to keep up with. Andrew Hoan, president of the Portland Metro Chamber, told OPB that in worse cases, the slew of taxes is pushing business out of the central city. That’s a statewide problem, he said, because nearly 60% of Oregon’s economy is dependent on business activity in Portland. The result, researchers note, is that when local taxes are combined, Portlanders are taxed at a high rate, slightly higher even than workers in New York City.

How much are property taxes in Oregon?

• Employers also pay Workers’ Benefit Fund (WBF) assessments, which are 2.0 cents per hour worked in 2025, funding programs for injured workers.
• Other changes brought on by the law, however, will benefit sweeping numbers of taxpayers, including a larger standard deduction and Child Tax Credit that are increasing faster than inflation.
• Estate tax is imposed when assets are transferred from an estate to heirs and beneficiaries.
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• Meanwhile, it slashes health care for poor and older Americans and cuts food aid to the Supplemental Nutrition Assistance Program, formerly known as food stamps.

Lawmakers should keep that reality in mind as they make changes to tax and economic policies. Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978. ​You can drop off your tax form and make non-cash payments in person at our main office in Salem or at one of our regional field offices in Bend, Eugene, Gresham, Medford, or Portland. However, Oregon does have a vehicle use tax that applies to new vehicles purchased in Oregon and a vehicle privilege tax that applies to new vehicles purchased by Oregon residents outside of the state. The tax must be paid before the vehicle can be titled and registered in Oregon.

Are there energy or vehicle credits in Oregon?

• Oregon lawmakers regularly assess the tax system based on economic conditions, public needs, and budgetary requirements.
• Certain types of income, like Social Security benefits, may be exempt from state income tax.
• ODHS said families with children over the age of 14 will also lose exemptions.
• The Corporate Activity Tax (CAT), effective since January 1, 2020, is levied on a business’s commercial activity, not its income.

Oregon leaders, including Gov. Tina Kotek, have pointed to various metrics contra asset account to highlight the weakening business atmosphere. The financial media network CNBC, for example, put Oregon as the 39th state in the country for its business environment. The same study put Oregon 43rd for cost of doing business and 47th for business friendliness. Most people who buy an average priced new car, which crept above $50,000 last year, won’t even pay $10,000 in interest over the terms of a five-year loan. This new break applies only to taxpayers who bought a new car in 2025, and in future tax years, through 2028.

About half of older taxpayers will save hundreds

The Oregon Department of Revenue will also Purchases Journal begin processing state income tax returns filed electronically on Jan. 26. Oregonians have had many opportunities to vote to have a sales tax, but except for very special forms of sales tax, always voted against them. Many of the things that in other states would be paid for by a sales tax are paid for by personal income tax and property tax. 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.