Progressive 4-Bracket System | 4.75% - 9.9% Rates | NO Sales Tax
| Income Range | Tax Rate | Tax on Bracket |
|---|---|---|
| $0 - $4,400 | 4.75% | Up to $209 |
| $4,401 - $11,050 | 6.75% | Up to $449 |
| $11,051 - $125,000 | 8.75% | Up to $9,971 |
| $125,001+ | 9.9% | On amount over $125k |
| Income Range | Tax Rate |
|---|---|
| $0 - $8,800 | 4.75% |
| $8,801 - $22,100 | 6.75% |
| $22,101 - $250,000 | 8.75% |
| $250,001+ | 9.9% |
Note: These are in addition to federal standard deductions.
While Oregon has one of the highest income tax rates (9.9%) in the nation, it's the ONLY West Coast state with NO sales tax (0%). This creates significant savings:
Oregon Resident:
Washington Resident:
Analysis: At $75k income, Washington saves ~$1,463/year. But for families with higher incomes ($100k+) or lower spending, Oregon becomes more competitive. Plus Oregon residents can shop sales-tax-free year-round.
Popular Tax Strategy: Some people live in Washington (near Portland/Vancouver) to avoid Oregon income tax, then shop in Oregon to avoid Washington sales tax. Legal for residents, but requires careful planning:
| State | Income Tax | Sales Tax | Total Tax ($75k) |
|---|---|---|---|
| Oregon | 4.75% - 9.9% | 0% | ~$5,063 |
| Washington | 0% | 9-10% | ~$3,600 (sales only) |
| California | 1% - 13.3% | 7.25-10.75% | ~$7,200+ |
| Idaho | 5.8% flat | 6% | ~$6,750 |
| Nevada | 0% | 6.85-8.38% | ~$2,740 (sales only) |
Some Oregon jurisdictions charge additional income taxes:
Impact: High earners in Portland can face combined state + local rates over 11%!
| Location | State Tax | Local Tax | Total Tax |
|---|---|---|---|
| Portland (Multnomah) | $11,838 (9.9% bracket) | $375 (1.5% on $25k over $125k) | $12,213 |
| Salem (Marion County) | $11,838 | $0 | $11,838 |
| Eugene (Lane County) | $11,838 | $0 (individual) | $11,838 |
| Bend (Deschutes County) | $11,838 | $0 | $11,838 |
Yes, Oregon taxes Social Security benefits the same way the federal government does (up to 85% of benefits may be taxable). However, Oregon offers retirement income credits that can offset some tax for eligible taxpayers over age 62.
Yes, Oregon taxes most retirement income including pensions, 401(k) withdrawals, and IRA distributions. However, the retirement income credit provides some relief for taxpayers 62+ with income under certain thresholds.
Oregon taxable income starts with your federal adjusted gross income (AGI), then applies Oregon-specific additions and subtractions. You then subtract Oregon's standard deduction ($2,835 single, $5,670 MFJ) or itemized deductions.
Oregon state tax returns are due on April 15, 2026 for the 2025 tax year (same as federal). Extensions are available until October 15, 2026.
Oregon doesn't have a separate capital gains tax rate - capital gains are taxed as ordinary income at the same progressive rates (4.75% to 9.9%).
No, Oregon does not allow you to deduct federal income taxes paid.
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