Comparing Taxes between Washington and Oregon (Seattle, Vancouver: sales, insurance, assessor)

[Redbelly]

Newbie here, planning a move from Michigan to the Portland area. We will both retired when we move, so we can pretty much move anywhere.

I am concerned about Oregon income taxes as we both have pensions, SS (I know it is not taxed in Oregon) and hefty RMDs from our IRAs at age 70 1/2. In round numbers, we will have an income of about $100K, plus SS. On the spending side, we will be only be spending about $75K a year, primarily for property taxes, insurance, food, travel and utilities. So, the higher sales tax in Washington should not be a significant offset to Oregon's state income taxes.

My question is, what other taxes / expenses am I overlooking that would help us make a decision on which state to settle in?

Thanks in advance.

[Hemlock140]

Many people, including my brother, move to Vancouver WA where they can take advantage of no income tax while doing any major shopping in Portland, with no sales tax. Out state gas tax is higher, but that shouldn't be much of an issue for retirees. Property taxes can vary by the local city/county levies approved by the voters.

[NCDavid]

My wife and I have a financial profile almost identical to yours. After living in Seattle all our lives, we moved to North Carolina for two years. When we moved back here a year ago, we dithered between Washington and Oregon and settled on Vancouver partly for tax reasons.
Most taxes and expenses are a wash. Property taxes are generally high in both states and, as noted above, depend on which taxing district you live in.
The major differences, as you already know, are the sales and state income taxes. Since I grew up in Washington, I hate paying a state income tax. I don't like paying an 8-plus percent sales tax either but Oregon is less than 15 minutes away. It's not worth the drive to avoid sales tax on small items (cost of gasoline) but it is worth it for major purchases. Saving $8.40 per $100 mounts up.
But, as I said, everything else is pretty much a wash.

[Redbelly]

Thanks for the thoughtful replies.

We are paying about the same property taxes in Michigan that I see listed on prospective homes of equal value in Vancouver / Camas so I'm OK with that. The kicker is the 9% income tax on our increasing RMDs as we age, if we go the Oregon route. Unless I'm missing something, I see about a $10,000 yearly penalty for choosing Oregon. That would buy some nice sunshine every winter.

[NCDavid]

Originally Posted by Redbelly

Thanks for the thoughtful replies.

We are paying about the same property taxes in Michigan that I see listed on prospective homes of equal value in Vancouver / Camas so I'm OK with that. The kicker is the 9% income tax on our increasing RMDs as we age, if we go the Oregon route. Unless I'm missing something, I see about a $10,000 yearly penalty for choosing Oregon. That would buy some nice sunshine every winter.

I don't think you're missing anything.
My wife and I just returned from a Saturday morning stroll with our dog on the trail/promenade along the north (Vancouver) side of the Columbia River, very scenic. The Salmon Creek nature trail is just a couple of miles from our house too. Vancouver is the oldest city in the state and has a lot going for it.
Of course there's no guarantee Washington won't have a state income tax in the future, but past attempts to install one have been overwhelmingly defeated by voters. It is big financial incentive to locate on the north side of the river. Good luck with your decision.

[StealthRabbit]

Oregon is rough on income taxes for retirees (Low thresh-hold).

WA will serve you well, especially if you choose your property taxing jurisdiction carefully.
WA will get you on taxes if you run a business in retirement, especially if it is capital intensive (Personal property tax and B&O).
If you are on a pension, or getting investment income WA will be beneficial.

Buying a 'fixer' / non-spiffed helps too. (but will not guarantee taxes based on sales price.) Assessor an gouge as he chooses. (And, unlike my props in TX, WA Assessor / county clerk know the sales prices cuz WA sellers pay a RE excise tax based on Sales Price.

[Redbelly]

Thanks, SR. What is the easiest / best way to compare assessment fairness by district? We are leaning toward Camas, in case that makes any difference.

[StealthRabbit]

There are plenty of taxing districts in Camas (different fire / ems / school bonds, ...) the county assessor will be able to split out each district and their levy. There should be a report for the entire county. I think it ranges from ~$10/ thousand in North County to $14.8/thousand in higher tax districts. MORE importantly is how assessor views / calculates the FMV. They add a multiplier / sf based on building quality, appearance, siding, concrete, decks, view, waterfront, ,,, about anything they can find to tax. I get assessed at $250 / sf and it cost me $48 / sf to build it. (another Homeschool project... we designed and built 3 from scratch, when kids were age 12 - 15.) Boys need to have their hands busy at that age. They made a GREAT return! Of course WA state (taxes) paid for their college (Running Start) instead of wasting time in HS. (Available in WA and HI)
https://www.k12.wa.us/SecondaryEduca...ningStart.aspx
Running Start - Wikipedia, the free encyclopedia

I pay over and over for that 'free' school. I have been contesting taxes since 2001, and they just keep getting worse. But the county Assessor has a REALLY nice new office (and high rise building to go with it!).

[Redbelly]

Thanks, I think I found what I need here: Tax Rates - Property Taxes - Treasurer - Clark County Washington

[bler144]

I always feel the need to remind people that 9% is the marginal rate, not the effective rate. As a married couple, esp. if your taxable pension is under 70k or so, your effective rate is probably more like 5-6% once you factor in deductions and credits. You can dummy up an Oregon full year form relatively easily to see what you'd actually pay.

If you are pulling down $150k annually in taxable income, then sure, your effective rate will start pushing towards 8-9%, but frankly that's a king's ransom in Portland.

That said, Portland has high quarterly water rates (water itself is cheap - but access fees/sewer are high, but that's a whole other thread). $100/mo for a 2 bedroom house wouldn't be unusual. Then if you're looking at living in Multnomah Co. you have the arts tax, plus possibly a 'street tax' in the near future, plus the emissions testing, etc. You can save on some of this by living in Clackamas or Wash. Co, however.

So personally I think people significantly overstate the impact of the income tax, but Portland city has a number of other costs that do add up.

For me the big tradeoff is that Vancouver isn't very walkable and has limited public transportation. Here's hoping you're in great health for another 20 years, but if something were to happen health-wise, living independently in Vancouver vs. the city (or the west side) is likely to be more challenging.