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Old 07-31-2009, 06:03 PM
31 posts, read 198,279 times
Reputation: 23


First of all I know the tax question has been beaten to death and all we can tell is that it was once a horse, but this *particular* question I wasn't able to find a clear answer for.

I will be moving to OR/WA soon and am wondering which will be a better situation for taxes. My primary income will, at least at first, be 1099 income from AZ.

1. I assume that I will pay income taxes to the state in which I reside, and NOT to AZ; correct?

2. I assume that if I reside in OR this will be taxable at OR's 9% rate and counted as normal income.

What I don't know is how it works in WA; I have heard that living in WA is not desirable for "independent contractors" and that many prefer living in Oregon. Why is this? Does "independent contractor" refer to my situation, a 1099 worker?

I know that a few of you get your income from other states but I don't know if you're W2 or 1099. If anyone is in my boat and knows the laws (not necessarily how you file! ) please respond. TIA!
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Old 08-02-2009, 08:15 PM
Location: Portland, Oregon
9,808 posts, read 15,900,383 times
Reputation: 6211
If you perform services in the state of WA you will be subject to their Business & Occupation tax on gross receipts. It doesn't matter whether or not you made a profit on your work.

Which State's tax structure works best for you is an individual issue. I recommend you do research.
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Old 08-03-2009, 07:01 PM
31 posts, read 198,279 times
Reputation: 23
This is my research.
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Old 08-03-2009, 08:35 PM
333 posts, read 694,854 times
Reputation: 261
I'd encourage you to to consult a tax professional - the HR Block people here could probably help you out for a small fee. If any of this is investment income you are better off in WA, period. The tax on investments is one reason many choose to retire outside of Oregon because they don't want their savings investments taxed as they sell them to live on. Also, most states require you to pay tax on the income you made while you were there, so you probably will pay AZ tax no matter when during the year you move to OR or WA. Also, I don't know the exact time limit but I remember hearing somewhere that if you live in Oregon for more than XXX months you will be taxed at the full rate even if you made the money in another state. There's a lot of money at stake in this for you - HR Block charges $150 last time I saw them for taxes, odds are they'll charge you a lot less than that for a few questions.
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