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 on purchases at retail stores, restaurants, gas stations, or online retailers shipping to Oregon addresses. This applies to clothing, groceries, electronics, and most other goods.
The absence of sales tax does not mean Oregon has no taxes on consumption. The state funds services through income tax, property tax, and specific excise taxes on items like gasoline, cigarettes, and alcohol. But the broad sales tax that exists in 45 other states does not exist here.
Key Takeaways
- Oregon charges no sales tax on retail purchases, groceries, clothing, or most goods and services.
- Online purchases shipped to Oregon addresses are not subject to Oregon sales tax, though the retailer's home state tax may apply in some cases.
- Oregon funds state services through income tax and property tax instead, which tend to be higher than in states with sales tax.
- Specific items like gasoline, cigarettes, and alcohol are subject to state excise taxes separate from any sales tax.
How Oregon's tax system works without sales tax
Oregon replaced sales tax revenue with income tax decades ago. The state has one of the highest income tax rates in the country — the top rate is 9.9 percent on wages and self-employment income. This is how the state collects revenue for schools, roads, and public services that other states fund partly through sales tax.
Property tax in Oregon also funds local services. The rate varies by county and school district, but homeowners and renters (through their landlords) pay property tax as a primary funding source for local government. Combined, income tax and property tax replace the sales tax revenue that exists in most other states.
What you pay instead of sales tax
Oregon has excise taxes on specific items. Gasoline is taxed at the pump — the rate changes periodically and is currently around 38 cents per gallon, though this varies. Cigarettes carry a state excise tax of $1.33 per pack. Alcohol is taxed at the wholesale level before it reaches stores.
These excise taxes are built into the price you see at checkout. You will not see them listed separately the way sales tax appears in other states. The total price you pay already includes these taxes.
Online purchases and Oregon tax rules
When you buy from an online retailer and have it shipped to an Oregon address, Oregon sales tax does not apply — because Oregon has no sales tax to apply. However, the retailer's home state may have its own rules about collecting tax on out-of-state sales.
Most large online retailers now collect sales tax based on where the item is being shipped, not where the retailer is located. So if you order from a retailer in California and have it shipped to Oregon, you will not pay California sales tax or Oregon sales tax. If you order from a retailer in a state with sales tax and have it shipped to Oregon, that state's tax typically does not apply either, since Oregon has no sales tax to reciprocate.
The exception is if the retailer has a physical presence in Oregon — a warehouse, store, or office. In that case, some retailers may collect Oregon's tax on orders, though Oregon itself has no sales tax to collect. This situation is rare and depends on the retailer's internal policy.
Comparison with neighboring states
Washington state, directly north of Oregon, has no income tax but charges 6.5 percent sales tax statewide, plus local sales taxes that can bring the total to 10.25 percent. Idaho, to the east, has both income tax (up to 5.8 percent) and sales tax (6 percent statewide, up to 8.5 percent with local taxes). California, to the south, has income tax (up to 13.3 percent) and sales tax (7.25 percent statewide, up to 10.75 percent with local taxes).
Oregon's approach — high income tax, no sales tax — means you pay more on wages but less at the register. Whether this is advantageous depends on your spending patterns and income level. Someone with high income and low spending may pay more overall in Oregon. Someone with low income and high spending may pay less.
What this means for your budget
If you move to Oregon from a state with sales tax, your grocery and clothing bills will be noticeably lower at checkout. A $100 purchase that would cost $107 to $110 in a high-sales-tax state will cost exactly $100 in Oregon. Over a year, this adds up.
However, your paycheck will be smaller if you earn income in Oregon, because the state income tax is higher than in most other states. Renters and homeowners also pay property tax that funds local services. The total tax burden — income, property, and consumption combined — is what matters for your household budget, not sales tax alone.
Frequently Asked Questions
Do I pay sales tax if I buy something in Oregon and take it home to another state?
No. Oregon charges no sales tax, so you pay nothing at the register in Oregon. If you then move that item to another state, that state does not tax goods you already own. Sales tax applies only at the point of purchase in the state where you buy it.
What about services — haircuts, car repairs, plumbing?
Oregon does not tax most services. A haircut, car repair, or plumbing job is not subject to sales tax in Oregon. Some states tax services; Oregon does not. You pay only the price quoted, plus any applicable excise tax if the service involves taxed items like gasoline.
If I order something online from out of state, will I owe Oregon sales tax?
No. Oregon has no sales tax, so there is no Oregon sales tax to owe. The retailer may collect sales tax for their home state or the state where they have a physical presence, but not for Oregon.
Are groceries taxed in Oregon?
No. Groceries are not subject to sales tax in Oregon. This includes food you buy at supermarkets, farmers markets, and most food retailers. Prepared food from restaurants and delis may have different rules depending on the item, but raw groceries are not taxed.
What if I run a business in Oregon — do I charge customers sales tax?
No. Oregon has no sales tax, so you do not charge it to customers. You collect payment for goods or services at the listed price. You may owe Oregon income tax on your business income, and you may owe federal income tax, but you do not collect or remit sales tax to Oregon.