Oregon’s state and local governments receive revenue from numerous sources, including federal transfer payments; tuition, hospital and other charges; Lottery revenue; and taxes. Of all these sources, half the state’s total revenue is from taxation. Personal income tax and corporate excise tax are the most significant components of the state General Fund, and property tax is the most significant local tax in Oregon. These three taxes represent about 80% of all state and local taxes. Oregon does not have a general state sales tax. As of 2020, the new corporate activity tax also started providing additional funding for K-12 education. 

The personal income tax is the largest source of state tax revenue, expected to account for 82% of the state’s General Fund for the 2023–25 biennium. Oregon’s taxable income is closely connected to federal taxable income. The state personal income tax rates range from 4.75% to 9.9% of taxable income. 

The corporate excise and income tax is the second largest source of state tax revenue. This is expected to account for 11% of the state’s General Fund for the 2023–25 biennium. The corporate tax rates are 6.6% and 7.6% of taxable business income. 

Local governments in Oregon began taxing property before statehood, but the current system is mainly the product of two statewide ballot measures (Measures 5 and 50) passed in the 1990s. In Oregon’s property tax system, each taxing district is limited to a fixed permanent tax rate, but voters can temporarily increase rates through local options levies or to repay bonds used to fund capital projects. Individual properties have a taxable assessed value equal to, or less than, the real market value. The taxable assessed value generally cannot increase by more than 3% per year, and it cannot exceed the real market value. Taxes for an individual property are calculated by applying the tax rates of the local districts to the taxable assessed value of each property, and are generally limited to no more than $5 per $1,000 of real market value for education districts and $10 per $1,000 of real market value for all other taxing districts. Levies to repay bonds are outside this limit.​