Supporting analysis · Oregon
The complexity tax in fees and dollars
Oregon's most expensive tax is the one that never appears on a line. Pull it apart and the numbers aren't neutral.
A tax printed on a rate card at least names what it costs. Oregon's most expensive levy is the one that never appears on a single line — the accumulated price of doing anything here. Pull the threads apart, though, and much of it does have a number, and the numbers are not neutral.
Start with the tax a business pays before it earns a dollar of profit. Oregon's Corporate Activity Tax is a gross-receipts tax: $250 plus 0.57% of Oregon commercial activity above $1 million, owed on revenue, not income. A firm registers at $750,000 in sales and pays whether the year was profitable or not. A 35% deduction for labor or cost of goods softens it but does not change its nature — it lands first, when a young company can least absorb it. Oregon also stacks a 7.6% corporate income tax on top; it and Delaware are the only states that levy both a corporate income tax and a gross-receipts tax. The state's own traded-sector review (Business Oregon, January 2025, roughly 400 firms) found the CAT "especially burdensome for small businesses because it is applied to revenue rather than profit," and concluded Oregon's problem is "not a recruitment challenge, but a retention challenge."
Then the personal side, where Oregon's most mobile people decide. The top income rate is 9.9%, and the brackets are not indexed to inflation. In Portland, two local taxes stack on top — Metro's 1% for Supportive Housing Services and Multnomah County's Preschool for All (up to 3%) — giving the city the highest combined local income-tax rate in the nation, 4%, on the Tax Foundation's own account; a high earner faces a marginal rate above 13% before federal tax. And Oregon taxes estates at 10–16% above a $1 million exemption — the lowest threshold of any state that levies the tax, unindexed for a quarter century. Washington just raised its exemption to $3 million; most competitor states have no estate tax at all.
The scorecard is blunt. The Tax Foundation's 2026 State Tax Competitiveness Index ranks Oregon 35th overall and 49th on its corporate code. The states recruiting Oregon's employers rank far higher: Florida 5th, Texas 7th, Tennessee 8th, Idaho 9th, Utah 15th, Nevada 20th.
Cost is not only tax; it is time and fees. Portland's system-development charges average over $20,000 per housing unit — enough that the city suspended them through 2028 to coax supply back. Oregon Business & Industry's 2024 manufacturing report ranked the state 45th in manufacturing growth and named the tax environment, cost of living, and scarcity of developable land as the eroding forces.
Here is the instinct to refuse: benchmark to the neighbors. The Council's own tax remedy is to "align" Oregon with neighboring states — but the neighbors are not winning. Washington fell to 45th on the same index; California sits near the bottom. Aligning to a struggling pack is a plan for staying 49th comfortably. The goal is to be the cheapest, fastest, simplest place in the country to build — and to let the people who build do the rest.
Sources: Oregon DOR — CAT · Tax Foundation — 2026 Index (Oregon) · Tax Foundation — Portland's high taxes · OBI — Condition of Oregon's Manufacturing Sector (2024) · Portland SDC exemption · Oregon Capital Chronicle — Business Oregon study.