How Much Tax Is Taken Out in Oregon?

Oregon has a distinct tax system, notably lacking a statewide sales tax. This leads to a greater reliance on personal income and property taxes to fund public services. Understanding these primary taxes, along with other fees, helps residents comprehend their overall tax burden.

Oregon Income Tax

Oregon operates a progressive income tax system, where higher earners pay a larger percentage of their income. For 2024, rates range from 4.75% to 9.9%. Specific tax brackets vary by filing status. For example, a single filer’s income up to $4,300 is taxed at 4.75%, while income exceeding $125,000 is taxed at 9.9%. Married individuals filing jointly have income up to $8,600 taxed at 4.75%, with income over $250,000 subject to the 9.9% rate.

Taxable income can be reduced by various deductions and credits. For 2024, the standard deduction is $2,745 for single filers or married individuals filing separately, $5,495 for married couples filing jointly or qualifying surviving spouses, and $4,420 for heads of household. Taxpayers aged 65 or older, or those who are blind, may qualify for an additional standard deduction.

Oregon offers several credits that can further reduce tax liability. The Oregon Earned Income Credit (EIC) is available to those who qualify for the federal EITC, providing 9% of the federal EITC amount, or 12% if there is a qualifying dependent under age three. The Working Family Household and Dependent Care Credit helps low- to moderate-income families with expenses related to caring for dependents while working or seeking employment. The Oregon Kids Credit, introduced for 2024, offers up to $1,000 per qualifying dependent child aged five or younger, with income limitations.

Income tax is typically “taken out” through employer withholding for most wage earners. Employers are responsible for calculating and remitting a portion of an employee’s wages directly to the Oregon Department of Revenue. Self-employed individuals or those with other sources of income not subject to withholding are generally required to make estimated tax payments throughout the year.

Oregon Property Tax

Property taxes in Oregon are assessed through a system influenced by Measure 5 and Measure 50. These measures altered how property values are assessed and how tax rates are applied. Property taxes are based on the lower of two values: the Real Market Value (RMV), which is the property’s actual market price, and the Assessed Value (AV). Measure 50 established the initial AV by reducing the 1995-96 RMV by 10%, and it limits the annual growth of this assessed value to no more than 3%, except for new construction or major remodeling.

Measure 5, passed in 1990, limits the total property tax levied per $1,000 of a property’s Real Market Value. It caps education taxes at $5 per $1,000 of RMV and general government taxes at $10 per $1,000 of RMV. If the total taxes calculated for a property exceed these limits, they are reduced to meet the caps, with local option levies being reduced first.

Property tax rates are expressed in “mills,” where one mill represents $1 of tax for every $1,000 of assessed value. These rates vary considerably by local taxing district, which include counties, cities, school districts, and various special districts. For example, a property with an assessed value of $200,000 in an area with a combined tax rate of 15 mills would pay $3,000 in property taxes.

Oregon offers certain property tax exemptions and deferrals. Disabled veterans, or their surviving spouses, may be entitled to exempt a portion of their homestead property’s assessed value from taxes. Senior citizens and disabled homeowners may qualify for a property tax deferral program, allowing them to postpone payment of their property taxes until a later date, though interest accrues on the deferred amount.

Other Oregon Taxes

Oregon does not impose a state or local sales tax. This means that consumers generally do not pay an additional percentage on goods and services purchased within the state.

Other taxes and fees are part of the financial landscape for Oregon residents. The state’s gasoline tax rate is $0.40 per gallon, effective January 1, 2024.

Vehicle registration and title fees are also assessed. These are typically flat fees or based on factors such as vehicle age or type. For instance, common vehicle registration fees can range from approximately $80 to $180 for passenger vehicles, while title fees are generally a flat amount, around $77. These fees are paid to the Oregon Department of Motor Vehicles upon registration or transfer of vehicle ownership.

In certain metropolitan areas, residents may encounter specific local payroll taxes that are directly withheld from their paychecks. For example, the TriMet transit payroll tax applies to residents working in the greater Portland metropolitan area, and the Lane Transit District (LTD) payroll tax applies to those working in the Eugene area. These rates are small percentages of income.