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Official Tax Guide

Oregon Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Oregon state taxes. Income tax (4.75% - 9.9%), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

Oregon State Tax Guide 2025

Welcome to Oregon! As you prepare for your move to the Beaver State, understanding the local tax landscape is essential for financial planning. Oregon is unique for its lack of a general sales tax, but it offsets this with a progressive income tax system.

Here is a comprehensive overview of what to expect tax-wise in 2025.

1. Income Tax

Oregon uses a progressive income tax system. This means that tax rates increase as your taxable income rises; it is not a flat tax.

For the 2025 tax year, the state income tax rates are structured as follows (rates are subject to legislative change, but these are the currently scheduled brackets):

  • 4.75% on taxable income up to $10,050 (for single filers) / $20,100 (joint filers).
  • 6.75% on income between $10,051 and $25,300 (single) / $20,101 and $50,600 (joint).
  • 8.75% on income between $25,301 and $125,000 (single) / $50,601 and $250,000 (joint).
  • 9.9% on income exceeding $125,000 (single) / $250,000 (joint).

Key Notes:

  • Standard Deduction: Oregon offers a standard deduction (approx. $2,740 for single filers and $5,480 for joint filers in 2024; 2025 figures will be indexed for inflation).
  • Itemizing: Many Oregonians itemize deductions, particularly for mortgage interest and property taxes paid.
  • Local Income Taxes: Unlike some states, Oregon does not generally levy local city or county income taxes.

2. Sales Tax

Oregon is one of only five states with no general state sales tax.

  • State Rate: 0%.
  • Local Taxes: There are currently no general local sales taxes added to the state rate. When you buy a car, furniture, or groceries, the price you see on the tag is generally the price you pay.

Exceptions:
While general retail sales tax is absent, there are specific excise taxes on certain goods and services, such as:

  • Vehicle Registration: When registering a car, you pay registration fees and a statewide privilege tax based on the vehicle’s value (often referred to as the "trip permit" tax structure).
  • Hotel/Lodging Tax: Most cities levy a transient lodging tax (hotel tax) on visitors.
  • Recreational Marijuana: There is a state tax on recreational cannabis sales (approx. 20% + local taxes).

3. Property Tax

Because Oregon lacks a sales tax, property taxes are a primary source of revenue for local services, including schools, fire districts, and libraries.

  • General Context: Oregon’s effective property tax rate is generally slightly below the national average. However, rates vary significantly by county and school district.
  • Assessment Limits: Oregon has unique laws (specifically Measure 5 and Measure 50) that limit how much assessed value can increase annually (capped at 3% per year for existing homes), regardless of how fast market values rise. This means long-time homeowners often pay significantly less than new buyers.
  • Expectations: For a new home buyer, effective rates typically range between 1.1% and 1.3% of the home's assessed value, though this can be higher or lower depending on specific local levies.

4. Other Notable Taxes

Gas Tax

Oregon has a state excise tax on gasoline. As of 2025, expect the state gas tax to be roughly 38 to 40 cents per gallon (excluding federal taxes). Note: Oregon is in a transition phase regarding gas taxes and EV fees as the state moves toward greener energy initiatives.

"Sin" Taxes

  • Alcohol: Oregon imposes excise taxes on beer, wine, and spirits. These are embedded in the shelf price.
  • Tobacco/Nicotine: There is a state tax on cigarettes (approx. $1.33 per pack) and a tax on inhalable nicotine products (vapes/e-cigarettes).

Inheritance and Estate Taxes

  • Inheritance Tax: Oregon does have an inheritance tax. This is paid by the person inheriting assets, not the estate itself.
  • Exemptions: Spouses are completely exempt. For non-spouses (children, siblings, etc.), the first $1 million of assets is generally exempt from taxation (this exemption is not indexed for inflation and remains fixed).
  • Estate Tax: Oregon has a separate estate tax, but it generally applies to estates exceeding $1 million.

5. Retiree Taxes

Oregon is moderately tax-friendly for retirees.

  • Social Security: Social Security retirement benefits are exempt from Oregon state income tax.
  • Pensions and IRA Withdrawals: Distributions from public and private pensions, as well as withdrawals from 401(k)s and IRAs, are taxable in Oregon.
  • Senior Income Tax Credit: Oregon offers a special tax credit for low-to-moderate-income seniors (and disabled individuals) which can result in a refund or reduction of tax liability.

6. Comparison to Neighbors

  • Washington (North): Washington has no income tax but a high sales tax (6.5% state + local). If you move from WA to OR, you will trade sales tax for income tax. Note: Washington recently introduced a 7% capital gains tax.
  • California (South): California has a high progressive income tax (up to 13.3%) and a high sales tax (7.25% state + local). Oregon is generally more tax-friendly for high-income earners compared to California, though property taxes in California are protected by Prop 13, making them potentially lower for long-term residents.
  • Idaho (East): Idaho has a lower flat income tax rate (currently 5.695% in 2024) and a 6% sales tax. Oregon is more attractive for income earners but higher for property owners compared to Idaho.

Disclaimer: Tax laws change frequently and can vary based on individual circumstances. The information provided in this guide is for general informational purposes only and is not a substitute for professional advice. Consult a CPA or tax professional before making major financial decisions.