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Oregon’s new bicycle tax

  • Oct 30, 2017 | Gail Cole

 In need of a new bike and live in Oregon? Buy before 2018 to avoid the upcoming bicycle tax.

Hang on to your helmets, Oregon cyclists: A new tax on bicycles takes effect in the Beaver State starting Jan. 1, 2018.

It may surprise some that lawmakers in Oregon, a state with no sales tax, decided to tax the sale of bicycles. Certainly, the move wasn’t without controversy. Many cyclists were outraged, feeling that the tax is a way for motorists to “get back at those damn cyclists.” Yet at least one lawmaker who backed the tax takes a different view: “The tax is a sign that biking has grown up,” says Rep. Earl Blumenauer.

The tax applies to the purchase of each new bicycle meeting all the following criteria:

  • It’s designed to be operated on the ground, on wheels
  • It’s propelled exclusively by human power (i.e., not electric bikes)
  • Its wheels are at least 26 inches
  • It has a retail sales price of at least $200

As retailers in Oregon may not be familiar with the dos and don’ts of transaction tax compliance, the Oregon Department of Revenue reminds them to “register with us before your first return and payment are due. You can’t file or pay without being registered for a bicycle tax excise account.” It adds:

  • The tax must be collected and remitted by retailers that sell bicycles to consumers in Oregon, either from a brick-and-mortar store or online
  • Retailers are required to state the tax separately on invoices, and must keep track of the number of bicycles sold during a reporting period (a month or quarter)
  • Retailers must file a return even if no bicycles were sold during the reporting period

There is a 5 percent penalty for failure to pay the tax owed by the due date. That penalty jumps to 20 percent if the return isn’t filed within 30 days of the due date. Interest is also added to late payments, calculated from the time tax becomes due.

Consumers in Oregon, also unfamiliar with transaction taxes, are reminded that if they don’t pay the bicycle excise tax at checkout, they’re responsible for remitting the tax owed to the Department of Revenue by the 20th of the month following the purchase. Additional information is available from the Department of Revenue.

Bicycles aren’t the only mode of transportation subject to a new tax come 2018. The Oregon Legislature also enacted a vehicle privilege tax on the privilege of selling new vehicles in Oregon, and a vehicle use tax on vehicles purchased out of state and brought to Oregon for use or storage. Learn more.

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.