Oregon does not fit the standard model and it is one of only five states in the nation that levies no sales or use tax which means increased disposable income. The State of Oregon does not impose motor vehicle excise tax, business and occupations tax, or any direct levies on intangible property such as stocks, bonds, or securities. State government is largely supported by personal income and corporate excise taxes. Local governments and schools are largely funded by property taxes. Oregon must balance expenditures with receipts and cannot operate in deficit or maintain a surplus.
State law requires the return of unanticipated revenues to taxpayers.
In addition to paying state income or excise taxes, most employers are also required to make contributions to the Unemployment Compensation Trust Fund and to purchase workers' compensation insurance coverage. The State Legislature has adopted the federal definition of taxable income with some modifications. The following schedule applies to the net taxable income of salaried workers, sole proprietors, and partners who are residents of Oregon. Non-residents of Oregon are also taxed at these rates on income derived from sources within the state. The property tax in Oregon is used for the support of local taxing districts such as public schools, cities, and counties.