AGs Opinion Raises Questions About Transportation Tax Repeal

The first thing to know about the state of Oregon’s tax system is that it includes no sales tax. This means that neither state nor local authorities collect taxes on the sale of products or services. Instead, the state generates revenue with a statewide income tax of 4.75% to 9.9%, ranking among the highest in the nation. Local governments levy property taxes, with the typical Oregon homeowner paying $3,895 per year in property taxes. Oregon has a graduated state individual income tax, with rates ranging from 4.75 percent to 9.9 percent. There are also jurisdictions that collect local income taxes, with high taxes in the Portland Metro area.

• If your file has already processed, you’ll have to make a new submission with the correct information for the incorrect W-2 or 1099.
• Jenny Hansson, a spokeswoman for Attorney General Dan Rayfield, says the Department of Justice has not yet formed a legal opinion on the proposed repeal.
• It’s essential for residents to mark these dates on their calendars and allow sufficient time to prepare their tax returns, thereby avoiding any potential penalties for late filing.
• Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.
• Hauser said the benefits are “deeply skewed” to high income Oregonians.
• The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare.
• The instructions for your Oregon return have worksheets you can use if you need help, especially if your filing status on your 2025 return will be different from the filing status on your 2024 return.

Filing state returns in Oregon

Whether that oregon income tax rate ends up as cash in your pocket generally depends on whether you owe taxes for the 2025 tax year. If you owe a significant amount, your kicker money will work as a credit toward that amount. If you were already due a refund, you’ll receive even more in the form of a kicker. Typically, about five out of six people filing by paper have been due a refund. So state tax officials say it’s in the taxpayer’s best interest to file electronically.

IRS Free File Fillable Forms

It’s unclear what percentage of taxpayers will claim the Child Tax Credit this tax season. Historically, close to 90% of taxpayers take the standard deduction, which is a set amount that a person doesn’t have to pay taxes on. The Tax Policy Center estimated that about half of taxpayers 65 and older will benefit from a new $6,000 deduction tailored just for their older age group.

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Oregon’s Medicaid expansion program covers people who make too much to qualify for the base Medicaid income requirements, or between 138 and 200% of the federal poverty level. The bill means Oregon is facing an estimated $15 billion in cuts to various state agencies over the next six years, the state’s chief financial officer said in August. The state also faces a $373 bookkeeping million shortfall in its ending fund balance, according to the latest revenue forecast.

Legislative Changes

In contrast, seven states, including Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming, impose no personal income tax. The rates range between 4.75% and 9.90%, with the tax you pay based on your taxable income. Bankrate.com is an independent, advertising-supported publisher and comparison service. Our websites may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened. Other factors, such as our proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site.

Importance of Understanding Tax Brackets

• For those with simple tax situations, TurboTax has a free filing option that it says will work for more than one-third of taxpayers.
• Government employee unions are pushing a wealth-tax ballot measure that would tax the possessions of higher income — stocks, artwork and intellectual property rights.
• Here, tax must be paid before the vehicle can be registered in Oregon.
• Republicans are heading into the short session focused on affordability, accountability and making the government live “within its means,” he said.
• Oregon also will start accepting state tax returns on the same day as the federal government.

Oregon taxpayers will still be able to electronically file their state taxes for free through Direct File Oregon, a 3-year-old program that about 14,000 residents used to file their personal income taxes last tax season. IRS Retained Earnings on Balance Sheet Free File is an alternative option to file federal income taxes for free in 2026 for households with an adjusted gross income of $84,000 or less. According to agency, the IRS was late in sending Oregon the necessary tax forms for 2025, and as a result, Oregon could not begin processing paper-filed personal income tax returns until late March.

Additional questions

• An Oregon estate tax return is required if the gross estate exceeds $1,000,000.
• Navigating the complexities of state taxes can be daunting, but understanding Oregon’s tax landscape is essential for residents and newcomers alike.
• The $40,000 SALT deduction is available for people making less than $500,000 a year.
• The state also faces a $373 million shortfall in its ending fund balance, according to the latest revenue forecast.
• One proposal, by Sen. Anthony Broadman, D-Bend, would clarify that local and state governments in Oregon will not collaborate with federal efforts to sell off public lands.
• Alcoholic beverages are taxed, including $2.60 per barrel for malt beverages and 65 cents per gallon for wine.
• If compiling and filing your taxes is an area you struggle with, a financial advisor can help.

The Corporate Excise Tax applies to corporations for the privilege of doing business in the state. The Corporate Income Tax applies to corporations with Oregon-sourced income not subject to the excise tax. Corporations with less than $500,000 in Oregon sales must pay a minimum tax of $150, with higher minimums for greater sales. Oregon’s tax system relies on a unique combination of revenue sources. Understanding these taxes is important for residents and businesses operating within the state. Democrats hold 18 of 30 seats in the state Senate and 37 of 60 in the state House, an increase since 2025 after Tillamook Rep. Cyrus Javadi switched parties from Republican to Democrat.