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 the register in Oregon, whether you are buying groceries, clothing, electronics, or other goods. This applies everywhere in the state — no county or city in Oregon charges a local sales tax either.
However, Oregon does tax some services and has other taxes that affect what you pay. Understanding what is and is not taxed in Oregon matters if you live there, work there, or buy things there regularly.
Key Takeaways
- Oregon has no statewide or local sales tax on retail goods, making it one of five states without this tax.
- Oregon taxes many services, including repairs, labor, and professional fees, at the state income tax rate or through specific service taxes.
- Oregon has a tax on lodging (hotel rooms and short-term rentals) that varies by location but is separate from sales tax.
- Groceries, prescription medications, and medical devices are generally not taxed in Oregon.
What Oregon taxes instead of sales tax
Oregon uses income tax as its primary revenue source. The state has no sales tax, but it does tax personal income, and the rates depend on your filing status and income level. Oregon's income tax brackets change each year.
Beyond income tax, Oregon taxes specific services. Labor and repairs are taxable in Oregon — if you hire someone to fix your car, paint your house, or repair appliances, that service is subject to Oregon's tax. The tax applies to the labor charge, not the parts. Professional services like accounting, legal information, and consulting are also taxable.
Telecommunications services, including phone and internet, are taxed in Oregon. Utilities such as electricity and natural gas are also subject to tax in most cases, though the rate and structure vary by utility and location.
Lodging tax in Oregon
Hotels, motels, and short-term rental properties in Oregon are subject to a lodging tax. This tax is charged per night and is separate from sales tax — it exists because Oregon has no sales tax but still taxes temporary lodging. The rate varies by city and county, ranging from around 6 percent to 12 percent depending on where you stay.
When you book a hotel room or short-term rental in Oregon, the lodging tax will appear as a line item on your bill. Some cities use the revenue from lodging tax to fund tourism and local services. If you are traveling to Oregon for business or vacation, budget for this tax when calculating your accommodation costs.
What is not taxed in Oregon
Groceries and food for home consumption are not taxed in Oregon. This includes items like bread, milk, vegetables, meat, and other foods you buy at a grocery store to prepare at home. Restaurant meals and prepared foods are also not subject to sales tax in Oregon, though some cities and counties may have other taxes on food service.
Prescription medications are not taxed in Oregon. Over-the-counter medications and medical devices like glucose monitors, hearing aids, and mobility aids are also exempt from taxation in most cases. If you are purchasing medical equipment, check with the retailer or the Oregon Department of Revenue if you are unsure whether a specific item is taxed.
How Oregon's tax system affects online purchases
When you order items online from out-of-state sellers and have them shipped to Oregon, you typically will not pay sales tax at checkout because Oregon has no sales tax. However, you may owe use tax on those purchases — a tax Oregon residents owe on items bought outside the state for use in Oregon. Most people do not pay use tax voluntarily, and Oregon does not actively pursue individual consumers for it.
If you are a business owner in Oregon, use tax rules may explore differently to your purchases. Businesses that buy goods for resale or use in operations should understand Oregon's use tax obligations, which are tracked on Oregon tax returns.
Comparing Oregon to neighboring states
Oregon's lack of sales tax makes it different from Washington, California, and Idaho, all of which have sales taxes. Washington has no income tax but charges sales tax on most goods. California has both income tax and sales tax. Idaho has both as well. Nevada, like Oregon, has no sales tax and no income tax, but Nevada does tax some services differently than Oregon does.
If you live near a state border, understanding the tax difference matters. Some people cross into Oregon to make large purchases to avoid sales tax in neighboring states. However, those purchases may still be subject to use tax in the state where you live, so the tax savings are not always what they appear to be.
Frequently Asked Questions
Do I pay sales tax on clothes and shoes in Oregon?
No. Oregon has no sales tax on clothing, shoes, or most other retail goods. You will not see a sales tax charge at the register when you buy clothes in Oregon, regardless of the price or type of clothing.
Is there sales tax on gas in Oregon?
No sales tax applies to gasoline in Oregon. However, Oregon does tax gasoline through a fuel tax that is included in the price per gallon. This fuel tax is separate from sales tax and is set by the state.
What about tax on haircuts and salon services?
Yes. Haircuts, salon services, and personal care services are taxed in Oregon. When you pay for a haircut or other salon service, the tax will be added to your bill. The rate depends on Oregon's current tax structure for services.
Do I owe Oregon tax on items I buy in another state and bring home?
Technically, Oregon residents owe use tax on items purchased outside Oregon for use in the state. However, use tax is rarely enforced for individual consumers. If you are a business, use tax rules may explore to your purchases and should be tracked on your tax return.
Are there any local taxes in Oregon cities?
Oregon cities do not charge local sales tax. However, some cities and counties may have other local taxes, such as lodging taxes in tourist areas or business taxes. Check with your specific city or county for any local taxes that may explore to your situation.