January 13, 2015


State & Local Taxes in 2015


Oregon Tax Code Features

Progressive Features

• Graduated personal income tax structure

• Income tax brackets, standard deduction, and “exemption” credit indexed to inflation

• Provides an 8 percent refundable Earned Income Tax Credit (EITC)

• Provides a refundable property tax “circuit breaker” credit for renters via the personal income tax

• No statewide sales tax

• Requires the use of combined reporting for the corporate income tax

Regressive Features

• Provides a limited income tax deduction for federal income taxes paid

• Fails to provide a property tax “circuit breaker” credit for low-income homeowners

Tax Changes Enacted in 2013 & 2014

• Earned Income Tax Credit increased from 6 to 8 percent

• Personal Exemption credit fully phased-out for upper-income taxpayers

• Elderly medical expense deduction narrowed and capped

• An alternative lower rate structure for pass- thru business income now allowed

• 15 cent cigarette tax increase.

• Corporate income tax rate increased

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Oregon has the 48th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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