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Oregon has earned its reputation nationally for being a cost competitive location for business. Recent national rankings reflect an economy that balances innovation, cost-efficiency, and a favorable tax environment with quality of life.

Notably, Oregon has no sales tax, no inventory tax (a single sales factor that benefits large employers with multiple operations), and an affordable property tax system.

Average industrial, commercial, and residential power costs are 25% below the national average, and nearly half those in California. With continued in-migration, labor costs are also among the most affordable on the West Coast.

BUSINESS COST COMPARISON – U.S. West Coast

Business Factor

Oregon

California

Washington

Average Industrial Electricity Rate (Mar. 2016; ¢/kWh)

5.59¢

10.49¢

4.13¢

Average Industrial Rate for Natural Gas (Dec. 2015, $/kcf)

$5.59

$6.92

$7.27

Average Annual Wage for Production Worker (Q1, 2015)

$31,680

$32,397

$28,825

Base Unemployment Insurance, range of rates  (As of July 1, 2015)

.015 – 5.4%

.016 – 6.2%

0.17 – 5.84%

State Unemployment Insurance Tax Rates (As of July 1, 2015)

(base: $35,700)

(base: $7,000)

(base: $42,100)

Min 2.2% 1.3% .17%
Max 5.4% 5.4% 5.84%

Average Annual Premium for Employer Sponsored Single Person Health Insurance (Employer Contribution,2014 data)

$4,793

$4,712

$4,973

Workers’ Comp premium index rate (as of Jan 1, 2014)

$1.37

$3.48

$2.00

State Individual Income Tax Rates (2014)                            

Lowest

5.0% ($0)

1.0% ($0)

None

Highest

9.9% ($125,000) 13.3% ($1,000,000)  

State Corporate Income Tax Rates (As of July 1, 2015)                           

Lowest

 6.6% ($0)

 

None

Highest

7.6% (>$1M) 8.84% ($0)  

State/local gross receipts, operations-based business tax

None

None

0.13-3.3%

State & Local Sales Tax Rates (As of July 1, 2015)

State

Local

Combined

None

None

None

7.5%

 (Average)  0.98%

8.48%

6.5%

(Average)  2.4%

8.9%

Sales or Use Taxes on Construction Costs (FY 2013)

None

8.84%

8.89%

State Sales Tax Collections Per Capita (FY 2013)

$0

$1,159

$1,978

State Gasoline Tax Rates (cents per gallon) (As of July 2015)

Excise tax

31.07¢

30¢

37.5¢

State & Local Tax Burden Per Capita (2012)

$4,094.86

$5,237.19

$4,541.48  

State Tax Collection Per Capita (July 1, 2015)

$1,296

$1,363

$1,345

Real Estate Transfer Tax

None

0.110%

1.28% of sales price + local taxes

State Business Tax Climate Index (2015 Tax Foundation)

#11

#48

#12

Sources: Tax Foundation, Oregon Employment Department, Washington State Employment Security Department, and California Employment Development Department, US Energy Information Association, Employer Health Benefits Survey, Premium rate ranking index, Oregon Insurance Division1 Washington does not have a corporate income tax but does have a gross receipts tax (Business & Occupancy Tax). While not strictly comparable to corporate income tax rates, it is imposed on revenues, not profits, resulting in noteworthy effective tax rates, particularly for small businesses and startups.2 The average DMV car registration in CA is not easy to find as it includes a vehicle license fee which is based on a percentage (0.65%) of the purchase price.