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Taxes in Oregon: State Tax Guide 2026

Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.

Oregon is defined by a stark trade-off: no sales tax, but one of the highest income tax rates in the nation. The top marginal rate of 9.90% — plus local income taxes in Portland-area jurisdictions — means high earners in the state face combined rates approaching 12%–13%. Property taxes are moderate thanks to constitutional limits. For shoppers, the absence of sales tax is a daily benefit. For earners, the income tax is the dominant consideration.

Oregon Income Tax Rates (2026)

Oregon uses a progressive income tax with four brackets. Rates for single filers:

Tax Rate	Taxable Income Range
4.75%	$0 – ~$4,050
6.75%	~$4,051 – ~$10,200
8.75%	~$10,201 – ~$125,000
9.90%	Over ~$125,000

Married filing jointly thresholds are approximately double. The top rate applies above ~$250,000 for joint filers.

Oregon’s standard deduction is ~$2,745 for single filers and ~$4,600 for married filing jointly — significantly lower than the federal amount. This means more of your income is subject to state tax.

Kicker refund: Oregon’s unique “kicker” law requires that when actual state revenue exceeds the forecast by more than 2%, the surplus is returned to taxpayers as a credit on the following year’s return. Kicker credits have been substantial in recent years.

Sales Tax

Oregon has no state or local sales tax. This applies to all purchases, including:

Retail goods
Vehicles
Electronics
Clothing
Prepared food (no restaurant tax at the state level)

Oregon is one of five states with no statewide sales tax. This represents significant savings on large purchases and everyday spending, but the state relies more heavily on income tax as a result.

Property Tax

Metric	Amount
Average effective rate	~0.82%
National average	0.99%

Oregon property taxes are below the national average thanks to Measures 5 (1990) and 50 (1997), which cap tax rates and limit assessed value growth.

Rate limits: Property taxes are capped at $5 per $1,000 of real market value for school operations and $10 per $1,000 for general government. Total tax rates cannot exceed $15 per $1,000 (1.50%) of real market value.

Assessed value cap: Assessed value (the taxable value) cannot increase more than 3% per year, regardless of how much market value rises. This creates a growing gap between assessed and market value in areas with rapid appreciation.

Example: A home with a market value of $500,000 but an assessed value of $320,000 (long-term owner) at a rate of $14 per $1,000 pays approximately ~$4,480 per year — well below what the market value would suggest.

Other Taxes

Estate tax: Oregon imposes an estate tax on estates above ~$1,000,000 — one of the lowest thresholds in the nation. Rates range from ~10% to ~16%.
No inheritance tax.
Capital gains: Taxed as ordinary income at rates up to 9.90%.
Corporate activity tax (CAT): A 0.57% tax on commercial activity (gross receipts) above ~$1,000,000, with a subtraction for 35% of the greater of cost of goods sold or labor costs. This tax is imposed in addition to the corporate income/excise tax.
Fuel tax: ~$0.40 per gallon (among the higher state gas taxes).
Cigarette tax: ~$3.33 per pack.
Marijuana tax: 17% state tax on recreational cannabis sales.
Local income taxes (Portland metro):
- Multnomah County Preschool for All: 1.50% on taxable income above ~$125,000 (single) / ~$200,000 (joint), with a 3.00% rate above ~$250,000 / ~$400,000.
- Metro Supportive Housing Services: 1.00% on taxable income above ~$125,000 (single) / ~$200,000 (joint).
- Arts tax: A flat ~$35 per year per resident of Portland.

Tax Breaks and Credits

Kicker credit: Automatic refund when state revenue exceeds forecasts. Recent kicker credits have exceeded ~$800 per filer.
No Social Security tax: Oregon does not tax Social Security benefits.
Retirement income credit: Oregon offers a credit of up to ~$7,050 (per person) for taxpayers 62+ with household income below ~$22,500 (single) or ~$45,000 (joint). This offsets some of the state’s taxation of pension and retirement income.
Oregon EITC: ~12% of the federal EITC for filers with dependents under 3; ~9% for all other qualifying filers.
529 plan deduction: Up to ~$300 per year per beneficiary for contributions to Oregon’s 529 plan ($600 for married filing jointly). Oregon also offers a refundable tax credit for lower-income contributors.
Political contribution credit: Up to ~$50 (single) or ~$100 (joint) for contributions to qualifying political candidates or parties.
Working family household and dependent care credit: A refundable credit of ~8%–40% of qualifying child care expenses, depending on income.

Key Takeaways

Oregon’s top income tax rate of 9.90% is the fourth-highest in the nation, and Portland-area residents face additional local income taxes pushing rates above 12%
No sales tax is a genuine daily benefit, saving residents hundreds to thousands per year depending on spending
Property taxes are moderate at ~0.82% thanks to constitutional caps on rates and assessed value growth
The $1 million estate tax threshold is the lowest in the nation and can affect middle-class homeowners in high-value markets
The kicker refund mechanism is unique to Oregon and can return substantial sums in years when revenue exceeds forecasts

Next Steps

Compare Oregon to other states at State Income Tax Comparison: All 50 States Ranked
Understand your federal obligation with the Federal Income Tax Guide 2026
Make sure you claim everything you can — Tax Deductions You’re Probably Missing
Ready to file? See How to File Your Taxes Step by Step

Tax information is for educational purposes only. Consult a licensed tax professional.