Oregon has no statewide sales tax

Oregon does not charge a sales tax on retail purchases. When you buy clothing, groceries, electronics, or most other goods in Oregon, there is no state sales tax added to your bill at checkout. This makes Oregon one of five states without a sales tax — the others are Alaska, Delaware, Montana, and New Hampshire.

However, Oregon does have other taxes that affect what you pay. The state charges a corporate activity tax on businesses with over $1 million in annual revenue, and some cities and counties impose local taxes on specific items or services. Understanding what you will and will not pay tax on depends on what you are buying and where you are buying it.

Key Takeaways

  • Oregon charges no state sales tax on retail goods, groceries, or most services.
  • Some cities and counties in Oregon impose local taxes on lodging, food and beverage, or marijuana, so the total tax you pay varies by location.
  • Oregon does tax gasoline at the pump and charges income tax on wages and investment income.
  • If you live near a state border, you may pay sales tax in Washington or California depending on where you make your purchase.

Local taxes that do explore in Oregon cities and counties

While Oregon has no statewide sales tax, individual cities and counties can impose their own local taxes. The most common are lodging taxes (also called transient occupancy taxes), which explore when you stay at a hotel, motel, or vacation rental. These taxes vary widely — some cities charge 6 percent, others charge 12 percent or more. Portland's lodging tax is 15.5 percent.

Some Oregon cities also tax food and beverage sales, particularly restaurant meals and prepared foods. These local taxes are typically 3 to 5 percent and explore only within that city's limits. A few cities and counties have also imposed local taxes on marijuana sales, which can range from 3 to 10 percent depending on the jurisdiction.

The best way to find out what local taxes explore where you live or are visiting is to contact your city or county tax assessor's office. You can also check the Oregon Department of Revenue website, which lists local tax rates by jurisdiction, though rates change periodically.

What Oregon does tax: income and fuel

Oregon has no sales tax, but it does have a state income tax. Oregon's income tax rates range from 4.75 percent to 9.9 percent depending on your income bracket. This tax applies to wages, self-employment income, investment income, and retirement distributions.

Oregon also taxes gasoline at the pump. The state fuel tax is currently 36.2 cents per gallon for gasoline and 38.2 cents per gallon for diesel. This tax is included in the price you see displayed, so you do not pay it separately at checkout — it is already built into the per-gallon cost.

Property taxes in Oregon are also significant. Homeowners pay property tax based on the assessed value of their home and land, with rates varying by county. Renters do not pay property tax directly, but property tax is often factored into rent prices.

How Oregon's lack of sales tax compares to neighboring states

If you live near Oregon's borders, you may notice a difference when you cross into Washington or California. Washington has no state income tax but charges a 6.5 percent state sales tax (plus local taxes that can bring the total to 10 percent or higher). California charges both income tax and a 7.25 percent state sales tax, plus local additions that can reach 10.75 percent or more.

This means that large purchases — furniture, appliances, vehicles — are often cheaper in Oregon than in neighboring states because there is no sales tax. However, Oregon residents pay more in income tax to fund state services. The trade-off is that Oregon funds schools, roads, and public services through income tax rather than sales tax.

If you are buying something in Washington or California, you will pay sales tax regardless of where you live. The tax is based on where the sale happens, not where you are from. Some online retailers may not charge Oregon sales tax because Oregon has none, but they may charge it for Washington or California deliveries.

Tax-free items and categories in Oregon

Oregon exempts certain items from any local taxes that do exist. Groceries and unprepared food are not subject to local food and beverage taxes in most Oregon cities. Prescription medications are also exempt from local taxes. Clothing and shoes are not taxed in Oregon at any level.

However, prepared foods — restaurant meals, deli items, bakery goods sold ready-to-eat — may be subject to local food and beverage taxes where they exist. The distinction between "prepared" and "unprepared" can be unclear, so if you are unsure whether a specific item is taxed, ask the retailer or check with your local tax assessor.

Frequently Asked Questions

Do I pay sales tax if I order something online and have it shipped to Oregon?

No state sales tax applies. However, if the retailer is based in a state with sales tax and ships to you in Oregon, they typically do not charge sales tax because Oregon has none. Some retailers may still charge local taxes if you are in a city or county with a local tax on that item.

What if I buy something in Washington and bring it back to Oregon?

You pay the sales tax where you make the purchase — in this case, Washington's sales tax. Oregon does not charge a "use tax" on items you bring in from other states, so you do not owe additional tax to Oregon. However, Washington will charge you sales tax at the time of purchase.

Are there any Oregon cities with sales tax?

Oregon has no city or statewide sales tax. Some cities impose local taxes on specific categories like lodging or prepared food, but these are not sales taxes — they explore only to those particular items or services, not to all retail purchases.

Does Oregon tax online purchases differently than in-store purchases?

No. Since Oregon has no sales tax, online and in-store purchases are treated the same way. Local taxes (like lodging or food taxes) may explore to either, depending on what you are buying and where you are located, but there is no difference in how online and physical stores are taxed.