I recently took my first trip to the northwest coast and was pleasantly surprised to find no sales tax in the state of Oregon—so of course I bought as many new clothes as I could carry back with me to Colorado. You too can take advantage of this if you move to the northwestern United States, only it gets better. If you move to the border of the states of Oregon and Washington you can save all sorts of money on taxes—because Washington has no income and lower home prices.
Though Oregon has one of the highest income tax rates in the country, the state currently has no sales tax. This means that you can shop for clothing and food to your heart’s desire without paying a penny over the listed price once you get to the register.
Interestingly, though not surprisingly, this has led to a huge increase in alcohol sales on the Oregon side of the Washington/Oregon border. In addition to alcohol, it is also really valuable to travel to places without sales taxes and purchase high value items—like electronics and other goods that tend to be pricier—because you can save a whole lot of money just by not paying this sales tax.
Residents of Washington, on the other hand, while paying sales tax pay no income tax and far lower house prices than their neighbors in Oregon. Meaning that if you were to live and pay taxes in the state of Washington, but do all of your shopping in Oregon, you could cut yourself a huge tax break simply by commuting between the two states.
If you’re looking to move somewhere and simultaneously save yourself a lot of money down the line, the Washington/Oregon border is definitely a place worth looking into. It is also one of the more beautiful parts of the country in terms of both nature and art.
What do you think? Would you be willing to move to the northwest coast in order to save money on taxes? Or do you live in another border area that has similar benefits for consumers?
How does the cost of living compare between Oregon and Washington?
While both states offer unique tax advantages, the cost of living can differ significantly, impacting overall savings for residents. Beyond taxes, factors like housing, utilities, and everyday expenses should be considered when evaluating whether to live in Washington or Oregon.
- Housing Costs: Washington generally has lower home prices than Oregon, particularly near the border, making it more attractive for those seeking affordable real estate. Oregon’s high demand and limited housing inventory often drive up prices, especially in cities like Portland.
- Utilities and Groceries: Utility costs can vary, but on average, Washington’s utility rates tend to be lower. However, grocery prices in Oregon are often more affordable due to the lack of sales tax, particularly beneficial for those who buy in bulk.
- Healthcare and Transportation: Oregon’s healthcare costs are typically higher than Washington’s, partly due to differences in state healthcare funding and coverage options. Additionally, commuting costs can be a consideration, especially for Washington residents who frequently shop or work across the border.
- Entertainment and Dining Out: Oregon’s no sales tax means lower costs for entertainment and dining, providing savings for Washington residents who visit frequently.
Taking into account both tax benefits and living expenses can help determine the most budget-friendly choice between these neighboring states.
Key Insights
- No Sales Tax in Oregon: Oregon residents do not pay sales tax, allowing significant savings on purchases like clothing, food, electronics, and alcohol.
- High Income Tax in Oregon: While Oregon has no sales tax, it compensates with one of the highest income tax rates in the country.
- Washington’s Tax Benefits: Washington residents benefit from no state income tax and lower home prices compared to Oregon.
- Border Living Advantage: Living on the Washington-Oregon border offers a strategic advantage: residents can shop in Oregon to avoid sales tax and live in Washington to avoid income tax.
- Economic Impact: The tax benefits in both states influence consumer behavior, notably increasing cross-border shopping for high-value items and alcohol in Oregon.
- Quality of Life: The northwest coast, particularly the Washington-Oregon border, is noted for its natural beauty and vibrant art scene, enhancing its appeal as a place to live.
FAQ
- Why does Oregon have no sales tax? Oregon has chosen to fund its government services primarily through income taxes rather than sales taxes. This policy aims to create a more equitable tax system by taxing based on income rather than consumption.
- How does Washington benefit from having no income tax? Washington attracts residents and businesses by offering a tax-friendly environment with no state income tax, which can result in significant savings for individuals and corporations.
- What is the main advantage of living on the Washington-Oregon border? The primary advantage is the ability to benefit from Oregon’s no sales tax and Washington’s no income tax, allowing residents to maximize their tax savings by strategically choosing where to live and shop.
- Are there any drawbacks to this tax strategy? While the tax savings can be substantial, there are potential drawbacks such as the cost and time of commuting, potential traffic issues, and the complexity of managing finances across state lines.
- How does Oregon compensate for not having sales tax? Oregon compensates with higher income tax rates. This approach ensures the state can fund public services and infrastructure without relying on sales tax revenue.
- Is it legal to live in one state and shop in another to save on taxes? Yes, it is legal to live in one state and shop in another. However, residents should be aware of and comply with any use tax laws that might require them to report and pay taxes on out-of-state purchases.
- How do property prices compare between Washington and Oregon? Generally, property prices in Washington, especially near the border, tend to be lower than in Oregon. This makes Washington an attractive option for those looking to save on housing costs.
- What types of items are most advantageous to buy in Oregon? High-value items such as electronics, alcohol, and clothing are particularly advantageous to buy in Oregon due to the absence of sales tax, resulting in substantial savings.
- How has the no sales tax policy affected Oregon’s economy? The no sales tax policy has positively impacted Oregon’s economy by attracting shoppers from neighboring states, boosting local businesses, and encouraging tourism and cross-border shopping.
- What are some other benefits of living on the Washington-Oregon border? Beyond tax savings, residents can enjoy the region’s natural beauty, outdoor recreational activities, a vibrant cultural scene, and a generally high quality of life.
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I am in the process of moving out of Oregon for WA. It is a number of years in the making but the delta on taxes makes it a recoup of expenses in 2 years. Oregon has not listened to me for a long time and I am voting with my feet. When they passed (in the Peoples Republic of Multnomah county) the "tax the rich" expense to couples making in excess of $250K I had the pleasure to make a check out for (pre school for all) $2,000 and (homeless tax) $3,000. When writing those checks that is what inspired the move. I got a place to move into in about 10 minutes (leased space) and now need to sell my Oregon properties, move the business, and move across the river. Better to get out before Oregon figures out anyone earning good money is being punished for working hard and smart. I am done being punished for living in a poorly run state. If you are a politician, I have the answer but I don't live there anymore so you won't be calling me, I get it. You will be great in your state as you watch it slowly turn into Greater Idaho. Get a clue already...
DLW,
It seems that Democrat's can only think of the government as the saviors of the poor or the downtrodden. The government screws up most of what it does. It hands money out blindly as a solution to all problems. We have handed out probably close to a trillion dollars from LBJ to now to the poor. Yet, the same problems still exist, and some are even worse. Conservatives don't advocate people going hungry but there is a better solution than government handouts. Why not keep the money for ourselves set up local charities and more personalized local solutions to these problems. Instead of a forced government tax at gunpoint why not create local solutions. Get voluntary donations do a good job and the donations will proliferate if you do a bad one then we can try some other concept. The Democrats have only one solution to all problems more government, less freedom and a gun to the head to make someone give up their money for a dubious government program that will not work or is just a slush fund for another politician. Imagine if we have thousands of local programs, one will finally work and that then can be replicated and adjusted to see if it could help in similar communities. The government solution is to just hand money out and the problem is solved. That obviously is not working. Anyhow, by the time the tax money goes to Washington and comes back to the local community its probably 10 cents on a dollar so its very inefficient as well. Yes, it helps some and kills others like (drug addicts, or alcoholics) but does nothing to end the crisis of poverty.
People should be taught to save money themselves for when the lose a job as well. I see it here all the time man works 30 years, loses jobs has nothing saved and is on the street. Where did the 30 years of paychecks go? Not a dime saved in all of that time? People need to be taught not to rely on the government for anything.
Fair points. The legislators are politicians first and unfortunately if you’ve been giving money to the low income (see: voters), and then take it away, you can say goodbye to those votes and your career. A difficult and complex problem with many solutions, shrouded in the ever-deepening abyss of bi-partisan politics. Cheers
Lifelong Oregonian, moved to Vantucky for a job 4 years ago. Night and day politically between Portland and Vancouver, opposites you might say. Instant 9% pay raise when I slipped out of Oregon's grasp (sales tax). We bought a house here in Vancouver. Some houses/neighborhoods are marginal but you get what you pay for. Now 4 years later the job has moved back to Oregon. Recently property tax has gone up 20% year over year. I now pay Oregon income tax and Washington sales tax on non food items.
No one is discussing the river/bridge situation. There are (10) bridges that cross the river that divides Portland into E. Portland and W. Portland. There are some commute/traffic issues on the (10) bridges over the Willamette River but it is somewhat manageable. The relevant commute issue for would be Washingtonians that would work in Portland are the (2) interstate bridges crossing the river between Portland and Vancouver. Yes, only two. Every day for hours at a time they both grind to a crawl during rush hour as some 300,000 cars commute from Vantucky to Hillsboro or other places in Oregon to work and then return later. Most of those cars have only one occupant. Washington is dead set against any plan to extend the light-rail system north across the Columbia river. Several attempts have been made to improve the interstate bridges but they bog down in Libertarian (Vancouver) vs. Progressive, green (Portland) politics. Add commercial interests that would suffer if another route to over the river bypassed their Vancouver customers elsewhere.
Our household both of us commute to Portland daily. This adds 2 - 3 hours to every working day, sitting in the car and trying to be positive about it. Want to save a buck on sales tax? That commute might burn three hours of your time if you don't plan around the gridlock. We make our purchases part of the daily commute. This is not the place it was was I moved here so long ago.
A very large percentage of the folks on the Washington side work in Oregon. That's where the jobs are. They pay both Oregon income tax AND Washington sales tax.
Why is this? I’m considering a job in Portland and was thinking I’d live in Washington to avoid the income tax, but my research is telling me that isn’t such a good idea.
Leaving Oregon to live in Wa. Lucky for me, my job is based in Oregon, but per my offer letter I work from my “Home office”, which is in my home in Wa, right across the river! I won’t have to pay income tax in Oregon!
You will be paying income tax based on where you work, not on where you live.
No sales tax on groceries in WA, lower property taxes, better public schools, PDX is a short drive across the river if you want it, plus you can shop there for other purchases, you can get more home for the money, if you retire their OR can't get at your IRA, there are still many tax advantages to living across the river. Plus WA side of the gorge is better, Mt Adams anyday over Mt Hood. Lots of cool stuff that the snobs across the river aren't even aware of.
Also just show your OR. drivers license to the sales clerk and you won’t have to pay sales tax in WA.
Arnie, I was born and raised in Oregon, a great great grandson of Oregon trail pioneers. I moved to Washington State as a young man and have now lived in Washington more than twice as long as I lived in Oregon. I married and raised a family here in Washington. I feel closely connected to both states and feel very proud and extremely lucky to have spent my life living in them.
I don't think you can find any two states that are closer in terms of their culture, ethics and economies. Washington was of course even part of the old Oregon territory, so these two states are truly very close sisters. I know that the vast majority of people in both of my states are very pleased to have each other as their neighbors and truly consider each other as equals so I fail to see the need for any animosity between the residents of our two states. It seems to me that we have enough tribalism in this country already without trying to create more.
Of course, if you LIVE in Washington, you are supposed to file a form with the Washington State Department of Revenue, detailing your Oregon purchases and paying the required sales tax. How many do? Only the DOR knows for sure.
You are supposed to submit use tax on your tax return each year for Amazon purchases and other on line purchases too, but nobody ever does, let alone the fact that most people don't do their own taxes because of how complicated they are to complete, so I highly doubt this is even a factor to consider. The government doesn't have the man power to audit every individual.
exactly, I was wondering the same...you are supposed to file and pay "use" tax for these purchases w/out sales tax. As you said most people don't and why would they if it's next impossible to enforce by the taxing authorities.
Hy Julia! your shared information is really informative for me and other as well. i was looking for a good place to visit in my next vocation under low budget. After reading you article i think i found my destination for now. keep writhing dear good job.
I was interested in Portland/Vancouver for the same reason and just traveled through there. I'm not sure that the lack of sales tax is really resulting in lower costs for consumers unfortunately. For example, at a McDonald's I visited in Vancouver WA a "Big Breakfast" cost $4.11 after tax ($3.79 + $0.32 sales tax). At a Portland OR McDonald's I visited a "Big Breakfast" cost $5.05 even though there was no sales tax. It's tough to say why because there could be lots of potential reasons. Perhaps the high income tax, high property taxes, or regulations are causing producers to prefer to do business in Washington, resulting in a higher equilibrium price in Portland.
I've worked on Washington side for 10 years and moved back and forth between Oregon and Washington side several times (usually for stretches of 2 years each) and there are huge pros and cons to both. You mentioned the financial pros of living and working on Washington side and they are big (I save about 6k a year) but the culture in Vancouver is that of a very generic and conservative suburb, with lower quality of homes or cookie cutter homes with little to no character that are more difficult to sell and not a very walkable city with the exception of downtown, which is on the rise. People also rarely interact with their neighbors, are considerably more religious and conservative (becoming more libertarian than GOP). It's a quality of life vs. financial issue. Six in one, half a dozen in the other.
Hi Michael - thanks for the input. I just moved to portland & every1 keeps saying do the commute- from Washington
but I'm thankful for your honest opinion. The quality of life is HUGE - people, housing, neighborhoods etc.
Ill wait down the line for that commute. if ever. thanks! :0)
That's exactly what I wanted to hear..... Not that I'm religious, but I'm more of a Libertarian and like my peace and quiet. I grew up in NYC and CA...hate freaken Liberal Democrats with a passion. I like to be close but not to close, far but not too far from businesses, but I don't want it next to my house. I want to be able to put up radio towers, don't want neighbor's kids on my lawn....not that I don't want neighbors, but don't want to reach outside my house window and pass the toilet paper out the window. I hate all those cookie cutter homes. I don't want the Yuppie home but a single story ranch style house with an outdoor shop with RV bay. I read this comment and you hit exactly what I'm looking for. Especially, as a retiree...on fixed income...I don't want ANY INCOME TAX. I lived in two of the most heavily taxed states in the nation so that I can cover people who don't work for a living. So as a retiree with a good pension, I can live anywhere I want. I want no income tax where I live, and cross the boarder for no sales tax. I have no problem paying taxes, but it needs to be a flat tax, equal across the board...until that happens, it's tax management and try to find the lowest possible. I worked for a living and never applied for Welfare and any other form of government employment assistance for not working. As far as paying taxes for roads, utilities....obviously I believe in paying my fair share. But, I don't want a large Law Enforcement agency but rather limited law enforcement....I believe in each person should be responsible for their own safety and security....CCW and learn personal protection. I can go on and on....but simply put, when seconds count they are minutes away.
Move to NV, or stay in CA Please!
I love how people like you love to throw around phases like "people who don't work for a living" the vast majority of people on public assistance are just looking for a helping hand due to circumstances out of their control, an illness of a family member that drained their income, a layoff from a job they've had for 25 or 30 years (sorry fact corporations are systematically eliminating all the baby boomers), Military families that have the bread winner stationed overseas and struggling to make ends meet, there are hundreds of reason why someone may need temporary help from the government in the form of food stamps ( do you advocate letting kids go hungry?). As far as unemployment insurance you pay and pay into the system through a tax deduction and if you should lose your job sue to no fault of your own you receive pennies on the dollar compared to what you put in. Like you I've paid taxes my whole like and fortunately never needed any help. So ponder this question what about people just like you and I who have paid taxes year after year and suddenly hit a bump in the road, shouldn't they reap the benefits of all those years of contribution to the system? Are there people that figure out how to bilk the welfare system, of course there is. Just like there are million and millions of people who figure out how to reduce their taxes though questionable or down right illegal tax deductions, which one is worse someone who needs help or a tax cheat robbing soldiers and preventing our interstate highways and national parks from being maintain? One last thought you may want to check out Vancouver before assuming that it is a haven of conservative thought, I don't live there but I know many people that do and I believe based on what I've heard that there are certain sections of Vancouver that may be more or less conservative or more or less liberal. But it is a state that legalized marijuana and has voted for a democrat in almost every presidential election including the last 6. So how conservative could it be? You may want to look at Texas if you are looking for a truly conservative state.
I live in Clark County Washington, just across the river from Portland. I moved up here from Austin Texas. Washington State as a whole is a blue state, thanks to the large metropolitan area in and around Seattle and Tacoma. The atmosphere is much different down in Vancouver (Clark County). Surrounding suburbs are extremely Conservative in Clark County, Specifically Battle Ground, Ridefield, Amboy, Yacolt, Camas, Washougal. Back in Texas, Austin is the only blue part of Texas.
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