Oregon vs Washington: Taxes & Take-Home Pay 2026

Portland and Vancouver: one metro, two opposite tax systems

Oregon has no sales tax and one of the highest income taxes in the country, with rates up to 9.90%. Washington has no tax on wages and one of the highest sales taxes. People who live in one and work or shop in the other cannot simply take the best of both, because each state taxes the activity it controls.

The comparison matters most in the Portland–Vancouver metro, where thousands cross the Columbia River every day, but it also comes up for Seattle and Portland job offers and for retirees choosing between the two coasts of the Northwest.

Income tax and payroll deductions side by side

On a $95,000 salary, a single Oregon resident pays $7,480 of Oregon income tax plus $665 for Paid Leave Oregon and the transit tax, $8,145 in total. A Washington resident pays $1,318 for Paid Leave and WA Cares and no income tax. Our Oregon figure leaves out the subtraction for federal income tax paid (up to $8,750), so actual Oregon tax is usually somewhat lower.

Live in Vancouver, work in Portland: you still pay Oregon

Oregon taxes nonresidents on Oregon-source income, which includes wages for work physically done in Oregon. A Washington resident commuting to a Portland office files Form OR-40-N and pays Oregon tax on those wages, even though Washington has no income tax to credit. Living in Washington saves Oregon income tax only on wages for work you actually do in Washington, such as days worked from home.

Portland-area high earners face extra local taxes if they live or work within the districts: Metro's Supportive Housing Services tax (1% of taxable income over $128,000 single / $205,000 joint) and Multnomah County's Preschool for All tax (1.5% over $125,000 / $200,000, plus another 1.5% over $250,000 / $400,000). If you live on one side of the river and work on the other, ask payroll which state's paid-leave premium it is withholding.

Live in Portland, shop in Vancouver: the use tax catch

The reverse trick does not work either. Washington residents who buy goods in Oregon without paying sales tax owe Washington use tax on items they bring home to use in Washington; the Department of Revenue gives exactly this example. Vehicles bought in Oregon are taxed when registered in Washington. At 9.57% on average, use tax on a $2,000 appliance is about $191.

Retirees and investors

Oregon does not tax Social Security, but it taxes pensions, IRA and 401(k) withdrawals at its regular rates, reaching 8.75% on modest incomes. Washington does not tax any of it. For a retiree with $60,000 of pension income, that alone can be several thousand dollars a year.

Oregon also cannot follow you. Under 4 U.S.C. §114, once you become a Washington resident, Oregon cannot tax the pension or IRA income you earned while working there. Washington's capital gains tax applies only to long-term gains above the annual deduction and excludes real estate and assets in retirement accounts, so most retirees never pay it.

Moving between the two states

The year you move, Oregon taxes all income received while you were a resident plus Oregon-source income afterwards; you file Form OR-40-P as a part-year resident. A worker earning $95,000 evenly who moves to Vancouver on May 1 and keeps working in Washington would owe Oregon tax on about a third of the year's wages. Oregon returns are due April 15, 2027 for 2026.

If you move to Washington but keep your Oregon job, little changes: your wages stay Oregon-source and taxable. The saving appears only if your work location moves too.