Oregon Tax Calculator 2026

Oregon Tax Overview

Oregon Income Tax Brackets 2026

Oregon has a graduated income tax with four brackets ranging from 4.75% to 9.9%. Even the lowest bracket starts at 4.75%, which is higher than many states' top rates. The top marginal rate of 9.9% applies to taxable income over $125,000 for single filers and $250,000 for married filing jointly. This makes Oregon's top rate the sixth-highest in the nation, behind California, Hawaii, New Jersey, New York, and Washington D.C.

Oregon provides its own standard deduction of approximately $2,420 for single filers and $4,840 for married filing jointly, which is substantially lower than the federal standard deduction. This means Oregon taxpayers have more taxable income at the state level than the federal level, amplifying the impact of the high rates. Oregon also provides a personal exemption credit of approximately $219 per person (adjusted annually), which is applied as a credit against tax liability rather than a deduction from income.

Oregon Statewide Transit Tax

In addition to the income tax, Oregon imposes a statewide transit tax of 0.1% (one-tenth of one percent) on wages earned by all Oregon residents and nonresidents working in Oregon. This tax is withheld from paychecks by employers and funds public transportation improvements statewide. While the rate is small, it applies to all wage income with no cap or exemption, adding to the overall tax burden on workers.

Oregon Has No Sales Tax

Oregon is one of only five states that does not levy any form of statewide sales tax, joining Alaska, Delaware, Montana, and New Hampshire. Oregon's sales tax-free status is deeply embedded in the state's political culture. Voters have rejected sales tax proposals numerous times, most recently in 1993. There is no sales tax at the state, county, or city level anywhere in Oregon.

This absence of sales tax makes Oregon an extremely attractive shopping destination, particularly for residents of neighboring Washington (which has no income tax but a 6.5%+ sales tax) and California (7.25%+ sales tax). The Portland metropolitan area, which sits on the Washington-Oregon border, sees substantial cross-border shopping as Washington residents travel to Oregon to make tax-free purchases on clothing, electronics, and other goods.

To compensate for the lack of sales tax revenue, Oregon relies heavily on income taxes, which account for approximately 80% of the state's general fund revenue. This heavy dependence on income tax creates revenue volatility, as income tax collections are more sensitive to economic cycles than sales tax revenue. During recessions, Oregon's revenue can drop sharply, leading to budget challenges.

Oregon Property Tax

Oregon's effective property tax rate is approximately 0.82%, which is below the national average. Oregon's property tax system is governed by two landmark ballot measures. Measure 5 (1990) limits property taxes to $5 per $1,000 of real market value for school taxes and $10 per $1,000 for general government taxes. Measure 50 (1997) rolled back assessed values to 90% of their 1995-96 levels and limits annual assessed value growth to 3%, regardless of actual market appreciation.

The combination of these measures means that long-term Oregon homeowners often have assessed values significantly below their property's actual market value, similar to California's Proposition 13 system. When a property is sold, the assessed value can "catch up" through a process called "exception value" assessment, but the 3% annual growth cap continues to apply from the new assessed value. Multnomah County (Portland) tends to have the highest effective rates in the state, while rural eastern Oregon counties may have much lower rates.

Oregon Corporate Activity Tax

Oregon enacted the Corporate Activity Tax (CAT) in 2019, which imposes a $250 flat tax plus 0.57% on Oregon commercial activity exceeding $1 million. The CAT is a gross receipts-style tax that applies to a broad base of business revenue, with a subtraction allowed for 35% of either the cost of goods sold or labor costs (the greater of the two). This tax generates approximately $1.5 billion per year and funds K-12 education. While technically a business tax, the CAT effectively functions as a hidden tax on consumption since businesses pass the cost on to customers through higher prices.

Oregon vs. Neighboring States

Oregon's no-sales-tax, high-income-tax profile creates interesting comparisons with its neighbors:

• Washington — No income tax, 10.25% avg sales tax, 0.84% property tax. Washington and Oregon are perfect tax complements: Oregon taxes income but not sales; Washington taxes sales but not income. For high earners, Washington is better. For high spenders, Oregon wins.
• California — 1%-13.3% income tax, 8.68% avg sales tax, 0.71% property tax. California taxes both income (at even higher rates) and sales. Oregon is definitively better for most people.
• Idaho — 5.695% flat income tax, 6% sales tax, 0.63% property tax. Idaho taxes both income and sales but at lower income tax rates. Better for high earners, worse for shoppers.
• Nevada — No income tax, 8.23% avg sales tax, 0.48% property tax. Nevada is the opposite of Oregon: no income tax but sales tax. Best for high earners who do not mind paying sales tax.

Use our state comparison calculator to compare Oregon to your current state.