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 of total state 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. 

The personal income tax is the largest source of state tax revenue, expected to account for 86% of the state’s General Fund for the 2021–2023 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. For tax year 2020, Oregon residents filed about 2.02 million Oregon personal income tax returns, representing about 2.74 million taxpayers, which includes spouses. Those taxpayers paid a final tax after adjustments, deductions and credits on average equal to about 6% to 7% of their total income. The top 10% of taxpayers in income paid roughly half of Oregon’s personal income tax, while the bottom half of taxpayers in income paid 9% of the total income tax. 

The corporate excise and income tax is the second largest source of state tax revenue. The corporate tax rates are 6.6% and 7.6% of taxable business income. For tax year 2019, about 1% of corporate taxpayers accounted for 56% of income and excise tax revenue from C corporations (standard corporations). The minimum corporate excise tax ranges from $150 to $100,000, depending on the corporation’s Oregon sales. Close to 68% of all C corporations paid the minimum tax for tax year 2019, but minimum taxpayers accounted for less than 7% of the total tax paid by C corporations in 2019. 

Local governments in Oregon began taxing property before statehood, but the current system is mainly the product of two statewide ballot measures passed in the 1990s, Measures 5 and 50. 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 of this limit.​