Tax & Accounting Blog

Oregon Sales Taxes Moving in Opposite Directions

ONESOURCE Indirect Tax November 17, 2017

Previously we reported on the city of Ontario, Oregon’s possibility of becoming the first city in the state of Oregon to levy a general sales tax. The rate, which was set at 1% on sales of non-exempt property, is schedule to take effect January 1, 2018. However after receiving the requisite number of 541 signatures, the city is going to put the question on the ballot as to whether the city should be allowed to move forward with the tax. The question will appear on the May 2018 ballot giving the citizens of Ontario one last chance to stop Oregon’s first sales tax.

Though Ontario’s citizens might hit the brakes on their levy, the state of Oregon is moving forward with two state wide taxes applicable to the sales of automobiles as well as a flat excise tax on sales of bicycles. The Vehicle Privilege tax applies to purchases of new vehicles in the state of Oregon. Receipts from these taxes will be used to fund electric vehicle rebates and general highway funding. This tax will only apply to the sale of new automobiles (those with fewer than 7,500 miles). The tax will apply to more than just cars however as motor homes, commercial vehicles, trailers, ATVs, mopeds, and motor cycles will be subject to the 0.5% tax.

Oregonians seeking to avoid the new car sales tax by travelling in a more “green” transportation method will find themselves paying $15.00 per bicycle in the nation’s first bicycle specific tax. Funds from this tax will be used to build and improve bicycle and pedestrian paths throughout the state. The tax will apply to any bicycle with wheels over 26 inches that costs over $200.00, but not motor assisted bicycles, which will be subject to the 0.5% tax.