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Oregon is one of five states without a state sales tax. However, recent legislative and constitutional proposals would change that. Not only would these measures add a state sales tax, but they would effectively overhaul Oregon’s tax structure.

 

First, a proposed bill (S.B. 824) would impose a new five percent sales tax. Items excluded from sales tax would include food, water, clothing, drugs, medical equipment, and utilities. The new sales tax bill would also overhaul Oregon’s tax structure in many ways, including:

  • Directing the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement
  • Reducing personal income tax rates
  • Subtracting from taxable income net long-term capital gains attributable to the sale of property used in a revenue-producing enterprise
  • Increasing the percentage of federal earned income credit permitted as a credit against Oregon personal income taxes
  • Creating an income tax credit to taxpayers certified as eligible for business investment (limited to $50 million per tax year)
  • Creating a refundable income tax based upon household income and size
  • Exempting the first $50,000 of assessed property value of a taxpayer’s home from property tax assessment

 

This bill would only take effect if a constitutional amendment (S.J.R. 36) is approved by the citizens of Oregon. Oregon has a history of opposing attempts to impose a state sales tax.

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