Oregon residents and nonresidents who earn income in Oregon pay personal income tax. During the 2019 Legislative Session, the Legislature passed the Student Success Act (House Bill 3427), which created a Corporate Activity Tax (CAT) dedicated to school funding. Effective beginning tax year 2020, the Legislature reduced Oregon’s first three income tax brackets from 5%, 7%, and 9%, to oregon income tax 4.75%, 6.75%, and 8.75% respectively.
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However, tax credits may be available for taxes paid to another state. Whether or not you have to pay Oregon state income tax depends on your residency status and the source of your income. Oregon residents are taxed on taxable income from all sources, while nonresidents are taxed on their income from Oregon sources. Remember that Oregon may have very different deduction laws from the Federal Income Tax, so you may have to write a whole new list of deductions for your Oregon income tax return. Homeowners 62 and older may qualify for Oregon’s property tax deferral program. If approved for the program, you will borrow money from the State of Oregon to pay your county property taxes.
- The new Oregon child tax credit, known as the “Oregon Kid’s Credit,” is worth up to $1,000 and is completely refundable.
- As mentioned, despite not having a sales or use tax, Oregon levies a vehicle use tax for all new vehicles purchased outside the state.
- And if legislators want to create a new tax giveaway for the well-off or a new tax subsidy for corporations, again, a simple majority is enough.
- Taxes pay to educate our children, to care for our seniors, and for many other services that we alone cannot shoulder.
- To avoid paying taxes, multinational corporations artificially shift billions in profits earned in the U.S. and Oregon to places that levy little or no corporate income taxes.
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- To download tax forms on this site, you will need to install a free copy of Adobe Acrobat Reader.
- Just like a married couple, domestic partners may file jointly or separately.
- Both companies produce multiple editions for simple to very complex tax returns, so be sure to carefully compare the features offered by each package.
- Oregon has a 40 cents per gallon gas tax rate and a $3.33 cigarette excise tax rate.
- Most tax preparers can electronically file your return for you, or you can do it yourself using free or paid income tax software, like the examples listed below.
- Oregon’s tax system differs from many other states as it doesn’t have a general sales tax.
- The State of Oregon collects $6,498 in state and local tax collections per capita.
As mentioned, property tax is an important source of revenue for the state. They pay for schools, healthcare for seniors, and many other services that we alone cannot shoulder. Unfortunately, right now our tax system falls short of addressing the needs and aspirations of all Oregonians.
things to know about Oregon’s tax system
Oregon does impose a fuel tax, with use fuel coming in at $0.40 per gallon, effective January 1, 2024. As mentioned, despite not having a sales or use tax, Oregon levies a vehicle use tax for all new vehicles purchased outside the state. One exception to this is for new vehicles purchased outside the state. Here, tax must be paid before the vehicle can be registered in Oregon.
State Income Taxes in Oregon
The Federal income tax also has a standard deduction, personal exemptions, and dependant deductions, though they are different amounts than Oregon’s and may have different rules. Keep in mind that this estimator assumes all income is from wages, assumes the standard deduction, and does not account for tax credits. Oregon has four marginal tax brackets, ranging from 4.75% (the lowest Oregon tax bracket) to 9.9% (the highest Oregon tax bracket). Each marginal rate only applies to earnings within the applicable marginal tax bracket.
After deductions and credits, the average effective tax rate is about 6.0% of adjusted gross income. Since 1993, the income tax brackets have been indexed to changes in the Consumer Price Index. The current standard deduction for tax year 2024 is $5,495 on joint returns, $2,745 on single and married filing separate returns, and $4,420 for a head of household return. Blind or elderly taxpayers, persons over the age of 65, will receive an additional $1,200 standard deduction on how is sales tax calculated a single return and an additional $1,000 per eligible person on a joint return.
Oregon’staxable income is closely connected to federaltaxable income. The state personal income taxrates range from 4.75% to 9.9% of taxable income. To avoid paying taxes, multinational corporations artificially shift billions in profits earned in the U.S. and Oregon to places that levy little or no corporate income taxes. In virtual accountant the mid-1970s, corporations contributed about 18 percent of all income taxes collected by the state of Oregon.