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Oregon Lawmakers Consider Sales Tax

A small handful of states do not have a general state sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Every once in a while, lawmakers in one of these states suggest instituting a sales tax. Three Democratic Oregon lawmakers are the most recent to take that generally unpopular plunge.

Senator Ginny Burdick, Senator Mark Hass, and Representative Tobias Read think the time may be right to create a general Oregon sales tax. Hass said that the Oregon revenue structure, which relies heavily on income tax, "looks like the Matterhorn." When incomes are high, the state has revenue. When incomes lag, as they have in recent years, the state revenue plummets. Sen. Hass argues that a "broader, more stable tax base" is needed to solve the state's financial woes.

In addition to creating a 5% general sales tax, the proposed tax reform would lower personal income tax and residential property tax. The sales tax would not apply to food, prescription drugs, or utilities.

Yet Oregon voters have rejected a sales tax nine times. Last spring, commissioners in Curry County decided not to put a proposed local sales tax before voters, even though they think a sales tax is necessary. Oregonians see sales tax as "regressive" -- everyone pays the same amount of tax on their toothpaste, no matter how much they make. With income tax, "the more you make the more you pay… ."

But perhaps it is time for a change in Oregon. Teachers are being laid off, and class sizes are growing. Bridges need repairs. The Oregonian Editorial Board writes, "The pervasive sense is our financial plight just can't continue… . … Oregonians carry one of the highest income tax burdens in the nation yet drag along with a below-national-average per capita income."

A sales tax may make sense for Oregon, but it will undoubtedly be a tough sell. Senator Burdick has joked,

"[I]f you were to take away the income tax, the property tax and the federal tax and offered everyone Oregonian a pony but asked for a sales tax, the answer would be no."

Of course, it may be that they simply don't want a pony.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.