Oregon does not have a statewide sales tax
Oregon is one of five states with no sales tax at all. You will not pay sales tax when you buy goods or services in Oregon, regardless of where the seller is located or whether you shop in person or online. This applies to clothing, groceries, electronics, and most other items.
The absence of sales tax does not mean Oregon has no taxes on purchases. The state funds itself through income tax, property tax, and other revenue sources. Some cities and counties have local taxes on specific services — mainly lodging and restaurant meals — but these are not sales taxes and do not apply to retail purchases.
Key Takeaways
- Oregon has no statewide or local sales tax on retail goods, groceries, or most services.
- Some Oregon cities charge a tax on hotel rooms and restaurant meals, but these are separate from sales tax and vary by location.
- Online purchases shipped to Oregon are not subject to Oregon sales tax, though the seller's state may have other rules.
- Oregon relies on income tax and property tax instead of sales tax to fund state services.
- If you move to Oregon from a state with sales tax, your overall tax burden may shift but will not disappear.
Local taxes on lodging and restaurants
While Oregon has no sales tax, many cities and counties do tax hotel stays and restaurant meals. These are called transient occupancy taxes (on hotels) and food and beverage taxes (on restaurants), and they are not sales taxes — they are local business taxes that get passed to the customer.
Portland, for example, charges a 12.5% tax on hotel rooms and a 2.5% tax on restaurant meals. Eugene charges 9% on hotels. Salem charges 10% on hotels and 2% on restaurant meals. These rates and which cities impose them change over time, so the tax you pay depends on which city you are in and what you are buying.
These taxes apply only to the specific service — a hotel stay or a meal at a restaurant. They do not apply to groceries, retail clothing, gas, or other goods you buy at a store. If you order takeout from a restaurant, the tax may or may not apply depending on the city's rules; call the restaurant or the city's tax office to confirm.
How Oregon's tax system works instead
Oregon funds state and local services through income tax, which is the main source of state revenue. Oregon's income tax rates are progressive, meaning higher earners pay a higher percentage. The state also collects property tax, which funds schools and local government.
Because Oregon relies on income tax rather than sales tax, residents pay tax on what they earn, not on what they spend. This means a person who earns $50,000 in Oregon pays income tax on that amount, but does not pay sales tax when they spend that money on goods. The trade-off is that Oregon's income tax rates are higher than in states that use sales tax.
What happens when you buy from out-of-state sellers
If you order something online from a company in another state and have it shipped to Oregon, you will not pay Oregon sales tax. Oregon has no sales tax to collect. However, the seller may be required to collect sales tax for their own state, depending on where they are located and the laws of that state.
For example, if you order from a retailer in California and have it shipped to Oregon, California's sales tax rules do not apply — but the retailer may still collect tax if they have a physical location or employees in California. The key point is that Oregon itself will not tax the purchase.
Comparing Oregon to neighboring states
Oregon's neighbors have different tax structures. Washington has no income tax but charges 6.5% to 10.25% sales tax depending on the county. California has both income tax and sales tax (7.25% to 10.75% depending on location). Idaho has both income tax and sales tax (6% statewide). Nevada has no income tax and no sales tax.
If you live near a state border, you may notice people crossing to shop in Oregon to avoid sales tax. However, Oregon residents who shop in Washington or California are responsible for paying that state's sales tax, even though they live in Oregon. The tax applies based on where the purchase happens, not where the buyer lives.
Special cases and exemptions
Oregon does not tax most services, but some are taxed. For example, labor and repair services are generally not taxed, but certain services like dry cleaning and vehicle repairs may be subject to local taxes in some cities. Prescription medications are not taxed, and neither are most medical services.
If you are unsure whether a specific purchase or service is taxed in your Oregon city, contact your city or county tax office. They can tell you whether a local tax applies and at what rate. The Oregon Department of Revenue also maintains information about statewide tax rules, though they do not administer sales tax.
Frequently Asked Questions
Do I pay sales tax on groceries in Oregon?
No. Oregon has no sales tax on groceries or any other retail goods. You will not see sales tax added to your grocery bill, even in cities that tax restaurant meals.
Will I pay sales tax if I buy something online and have it shipped to Oregon?
No sales tax from Oregon will be charged. The seller may collect sales tax for their own state if they are required to, but Oregon itself does not tax the purchase.
What is the tax on a hotel room in Portland?
Portland charges 12.5% tax on hotel rooms. This is a local tax specific to lodging, not a sales tax. Other Oregon cities charge different rates, so check your specific city.
If Oregon has no sales tax, why are my taxes so high?
Oregon funds services through income tax instead. Oregon's income tax rates are higher than in states with sales tax. Whether your overall tax burden is higher or lower depends on how much you earn and spend.
Do I owe Oregon sales tax if I buy something in Washington and bring it home?
No. Oregon has no sales tax to owe. You would owe Washington sales tax at the time of purchase in Washington, but Oregon does not tax goods brought into the state.