Oregon does not have a statewide sales tax
Oregon is one of five states with no sales tax at all. When you buy something in an Oregon store or online from an Oregon seller, there is no sales tax added to your receipt. This applies to most goods — clothing, groceries, electronics, furniture — and to most services. The price you see is the price you pay.
This does not mean Oregon has no taxes. The state funds schools, roads, and services through income tax instead. Oregon's income tax rate is higher than the national average, and the state also collects business taxes, property taxes, and excise taxes on specific items like gasoline and cigarettes. But at the checkout counter, you will not see a sales tax line.
Key Takeaways
- Oregon charges no sales tax on purchases made within the state, whether you buy in person or from an Oregon business online.
- Some services — such as labor, repairs, and professional fees — are also not subject to sales tax in Oregon.
- If you buy something online from a seller outside Oregon, you may owe sales tax to that seller's state, not to Oregon.
- Oregon funds state services through income tax, which is why the state income tax rate is higher than in states with sales tax.
- Certain items like gasoline, cigarettes, and alcohol are subject to Oregon excise taxes, which are separate from sales tax.
What items are not taxed in Oregon
Because Oregon has no sales tax, most purchases are tax-free. This includes clothing of any price, groceries and food items, books, school supplies, and household goods. It also includes labor and services — when you pay a plumber, electrician, or accountant in Oregon, there is no sales tax on their bill.
The main exception is items subject to Oregon's excise tax. Gasoline, diesel fuel, cigarettes, and smokeless tobacco carry an excise tax that is collected at the pump or at the register. Alcohol — beer, wine, and spirits — is also taxed through an excise system. These are not sales taxes; they are specific taxes on specific products, and they exist in Oregon even though sales tax does not.
How online purchases work when you buy from out-of-state sellers
When you order something online from a company based outside Oregon, that company may charge you sales tax based on where it is located and where you live. This is not an Oregon tax — it is the tax of the state where the seller operates. For example, if you order from a California retailer, California may require them to collect California sales tax from you.
The rule that applies is called sales tax nexus. A seller must collect sales tax in states where they have a physical presence (a warehouse, office, or store) or where state law requires them to collect based on their sales volume. Amazon, for instance, collects sales tax in most states because it has warehouses and operations in those states. A small business in another state may not collect Oregon tax, but it may collect tax for its own state.
If you are an Oregon resident and you buy from an out-of-state seller who does not collect tax, you are technically supposed to report that purchase on your Oregon income tax return and pay what is called use tax. In practice, very few individuals do this, and Oregon does not have a mechanism to track individual online purchases for this purpose. The rule exists mainly for business purchases.
Why Oregon has income tax instead of sales tax
Oregon chose to fund state government through income tax rather than sales tax. This decision was made in the early 1900s and has remained in place. The result is that Oregon residents pay income tax on wages, interest, dividends, and other income at rates that are higher than the national average, but they pay nothing at the register.
States make different choices about how to fund themselves. Some states have both income tax and sales tax. Some have sales tax but no income tax (like Texas and Florida). Oregon's choice means that the tax burden falls more heavily on people who earn income and less heavily on people who spend money. This can matter if you are retired and living on savings, or if you spend a large portion of your income — you will pay less in Oregon than in a state with sales tax.
How to handle taxes when you move to or from Oregon
If you move to Oregon from a state with sales tax, you will notice when ready that there is no tax at checkout. This can feel like a benefit, but remember that Oregon income tax is higher. If you are working in Oregon, your paychecks will have more withheld for state income tax than they would in a sales-tax state.
If you move away from Oregon to a state with sales tax, you will start paying sales tax on purchases. You will also owe income tax to your new state (unless it has no income tax). Oregon will stop taxing your income once you establish residency elsewhere, but you may owe Oregon income tax for the part of the year you lived there.
Excise taxes you will actually see in Oregon
While Oregon has no sales tax, you will pay excise taxes on certain items. Gasoline and diesel fuel carry a state excise tax that is included in the price per gallon — as of recent years, this tax is among the highest in the nation, though the exact rate changes. When you fill up your tank, part of what you pay goes to this tax.
Cigarettes and smokeless tobacco are taxed at a high rate per pack or unit. Alcohol — beer, wine, and liquor — is taxed through Oregon's Liquor and Cannabis Commission, with different rates depending on the type of alcohol. These taxes are built into the price you see, not added at the register like a sales tax would be.
Frequently Asked Questions
Do I pay sales tax if I buy something online from an Oregon company?
No. If the seller is based in Oregon, there is no sales tax, even if you live outside Oregon. However, your home state may require the Oregon seller to collect your state's sales tax. Check with your state's tax authority if you are unsure.
What about services like haircuts, car repairs, or restaurant meals?
Haircuts and car repairs are not subject to sales tax in Oregon. Restaurant meals are also not subject to sales tax, though some counties charge a local tax on prepared food — this is separate from sales tax and varies by location. Check your county's rules if you are unsure.
If I buy something out of state and bring it to Oregon, do I owe Oregon tax?
No. Oregon has no sales tax or use tax on items you bring into the state. You may have owed tax in the state where you bought it, but Oregon does not tax the item once it is in the state.
Why is Oregon gas so expensive if there is no sales tax?
Oregon's gasoline excise tax is one of the highest in the nation. The excise tax is built into the pump price, so you do not see it as a separate line item, but it makes up a significant portion of what you pay per gallon.
Do I need to pay use tax on things I order online from out-of-state sellers?
Technically, Oregon law requires you to report and pay use tax on out-of-state purchases, but this is rarely enforced for individual consumers. It is mainly enforced for business purchases. If you are unsure whether a particular purchase requires use tax, contact the Oregon Department of Revenue.