Tax question regarding Portland, OR and Vancouver, WA (Hillsboro: sales, apartment)

[HowGoesIt]

Greetings City-Data folk. I have a question about the tax situation in Oregon and Washington. I have a friend who is taking a job in Vancouver, but is a city person and wants to live in Portland. I'm aware that WA has no state income tax (which is great!) and OR has a very high state income tax (not so great).

If he lives in OR, but works in WA does he have to pay the Oregon state income tax? Also, how does property tax differ between the two states? Also, correct me if I'm wrong, but Oregon doesn't have a sales tax, correct?

Thanks!

[Leisesturm]

The tax thing. Oregon is not the only state with an income tax. Washington is not the only state with a sales tax. A very few have both! Most have one or the other. Taxes are not bad. Missuse of tax revenue is bad. 10.5% might seem 'high' but consider that NYC has both a 10.5% income tax and an 8.375% asles tax and perhaps you begin to get some perspective? Personally I do not spend much on taxable items. It would benefit me to live in WA more than OR but I like living in OR so... ... I live car free (car lite) so when I have to go somewhere I usually Google map it and toggle over to the mass transit link (very cool). I find that a trip from my home in Hillsboro to a location on the east side of Portland, not even very far east, will cost over $15.00 by car vs $2.30 with my all zone ticket. That is $30.00 round trip. A Portland to Vancouver round trip is at least that and more. I am told the bridge is a bottleneck and what is your friends time worth? At the end of a year of doing that even if the IRS has no provision for interstate tax collection (but I think they do) I would gather that rather than saving money in the arrangement one has merely spent it enriching various entities centered around automobiles and their care and feeding. Me, I don't think too much about it. I live where I want to live and I work where I can find a job. I've chosen to live in Hillsboro because there was not a job dictating otherwise. If I should find that the only job that I can obtain is in WA I'll be researching Vancouver neighborhoods for apartment vacancies. For someone who already knows where their job is then it simply IMO does not make sense to consider living more than 30 minutes from that job.

H

[Minervah]

Originally Posted by HowGoesIt

Greetings City-Data folk. I have a question about the tax situation in Oregon and Washington. I have a friend who is taking a job in Vancouver, but is a city person and wants to live in Portland. I'm aware that WA has no state income tax (which is great!) and OR has a very high state income tax (not so great).

If he lives in OR, but works in WA does he have to pay the Oregon state income tax? Also, how does property tax differ between the two states? Also, correct me if I'm wrong, but Oregon doesn't have a sales tax, correct?

Thanks!

I had a friend who lived in OR and worked in Vancouver WA. Yes she had to pay OR income tax. However, if you go to WA and show them proof you live in OR you do not have to pay sales tax when you buy something in WA.

[Nell Plotts]

If I worked on the WA side of the Columbia River I would live there if for no other reason commuting across the River can be exasperating, and with the replacement of the bridges on I-5 will be that way for a long time. I have lived in both states and find that that neither legislature is perfect.

[StealthRabbit]

Originally Posted by Minervah

... However, if you go to WA and show them proof you live in OR you do not have to pay sales tax when you buy something in WA.

This is totally at the option of the WA store, as reporting OR sales on WA tax form is a real pain, and the few OR shoppers in WA doesn't warrant the effort for some businesses. (hint:... you can not demand this)

Granted this is really tough on WA retailers.

ON the income tax issue.... you are taxed;
1) on your domicile (where you have full-time status)
2) on your physical location of earned wages.

thus;
If you live in OR you pay OR income tax, regardless of where it is earned.

If you live in WA and earn your income while physically working in OR you pay OR income tax.

If you live in WA and work for an OR employer, but physically work in WA (from home or in WA sales district), you only pay OR tax on income earned while physically in OR (Meetings / training / picking up company car...)

[Minervah]

This is totally at the option of the WA store, as reporting OR sales on WA tax form is a real pain, and the few OR shoppers in WA doesn't warrant the effort for some businesses. (hint:... you can not demand this)

I didn't think they had the option. I know I have used this in other states as well and no one ever questioned it.

[pw72]

This issue has come up in other threads. If you live in Washington and buy something in Oregon you are legally required to report it and be taxed on it. However, few do, and nobody really tracks it. However, and this is a BIG however, a large-ticket item like a car or boat is a completely different story and you likely will be caught.

[BLAZER PROPHET]

I am a homeowner in Vancouver and work in Portland.

I pay a portion of the OR income tax. Not 100%, but a portion. As to property taxes, I live in a 900 SF house and pay $1,100 per year. I asked 3 people who have sijilar size houses in Portland and they pay between $2,700 and $3,200 per year in property tax.

Clearly, it's much cheaper to reside in WA with respect to taxes. However, I have a commue that costs me $90 per month that might be only $20 per month in Portland, so that's something to consider.

Also, WA does not tax food from a grocery store and gas is about 7-10 cents cheaper in WA.

[PNW-type-gal]

Originally Posted by pw72

This issue has come up in other threads. If you live in Washington and buy something in Oregon you are legally required to report it and be taxed on it. However, few do, and nobody really tracks it. However, and this is a BIG however, a large-ticket item like a car or boat is a completely different story and you likely will be caught.

The Washington sales tax due on a vehicle is paid at the time the vehicle is registered, not purchased. Doesn't matter what state you bought the car in. The other thing to keep in mind in buying a new car is that one state's lemon laws do not apply to a resident of another state.

[ucbedge]

Wow - I would love to have this dilemma. Here in Los Angeles County, our sales tax is increasing to 9.75% in a few days on top of the high income taxes we pay on every dollar earned. Plus I've been told to budget 1.1% for property taxes if we were to buy a home down here. Either Oregon or Washington looks like paradise!!!!!!! :-)