Oregon’s new vehicle taxes

Although Oregon doesn’t have a general sales tax, the legislature enacted three taxes on wheeled forms of transportation in 2017. Beginning Jan. 1, 2018, there’s a tax on the privilege of selling new vehicles in Oregon, a use tax for vehicles that were purchased in other states, and a tax on the sale of bicycles.

The vehicle privilege tax applies to vehicles that:

• Have 7,500 or fewer miles
• Weigh 26,000 pounds or less
• Have not been titled in Oregon

Vehicles subject to the tax include bus trailers, campers, commercial buses and motor vehicles, mopeds, and motor homes. Somewhat surprisingly, electric-assisted bicycles are subject to the vehicle privilege tax rather than the new bicycle tax.

The tax does not apply to:

• All-terrain vehicles
• Vehicles sold to residents of other states (provided they’re primarily used outside of Oregon)
• Vehicles sold for storage or use outside of Oregon
• Vehicles sold at an event of fewer than seven days, provided admission is charged to enter and vehicles are sold at auction

Vehicle dealers located outside of Oregon that lack a physical presence in Oregon sufficient to establish a tax obligation (nexus) are not required to collect the new vehicle privilege tax, although they’re welcome to register with the state and collect and remit it. Some companies do this to save customers the trouble of remitting use tax. Oregon residents who do pay the Oregon vehicle privilege tax to an out-of-state dealer should keep an invoice, receipt, or other proof-of-sale document indicating the amount of tax paid, as it may be required to register and title the vehicle in Oregon.

Oregon residents who purchase a new vehicle outside of Oregon and don’t pay the Oregon vehicle privilege tax at the time of sale are required to remit the vehicle use tax directly to the Oregon Department of Revenue by the 20^th of the month following the purchase. The vehicle cannot be titled or registered in Oregon until the tax has been paid. Additional information is available from the Oregon Department of Revenue.

Learn more about the Oregon bicycle tax here. And learn how tax automation software facilitates compliance in all states here.