Update: Below is an article on the Internet sales tax rules for this state prior to the Supreme Court's decision in South Dakota v. Wayfair Inc. on June 21, 2018. The Wayfair decision overturned the prior rule established in Quill Corporation v. North Dakota which prohibited states from requiring a business to collect sales tax unless the business had a physical presence in the state. Some states already had laws prior to the Wayfair decision (commonly referred to as Amazon Laws) that require larger Internet sellers without a physical presence in the state to collect and pay sales tax under certain circumstances. It is expected that states will now pass new laws requiring online retailers to collect sales tax for sales within their state. We will update this article as the laws change. For more information, see Internet Sales Tax: A 50-State Guide to State Laws.
Oregon is one of five states with no state sales tax. The others are Alaska, Delaware, New Hampshire, and Montana. Therefore, if you are selling goods or products over the Internet to customers located in Oregon, sales tax for those customers should be a non-issue.
However, at the federal level, Congress has repeatedly considered legislation that would affect large Internet retailers and how online sales taxes are collected in all states. The most recent form of a proposed federal law is the Marketplace Fairness Act of 2015. As in previous versions, the 2015 Act would allow states to require sellers not physically located in their state to collect taxes on online and catalog sales made to people in their state. Sellers that make $1 million or less in annual sales and have no physical presence in the state would be exempt from this requirement. States would have to meet certain criteria to simplify their sales tax laws and make sales tax collection easier before they could require sellers to collect the tax.
Sales Tax Statement from the Oregon DOR
The Oregon Department of Revenue (DOR) has a very brief webpage on sales tax. It succinctly states that “Oregon does not have a general sales tax or a use/transaction tax.” A use tax is a complementary tax to sales tax, and applies in states that have a sales tax.
For States That Have Sales Tax
The current default rule throughout the United States is that you must collect sales tax on Internet sales to customers in those states where your business has a “physical presence”—assuming, of course, that the state involved has a sales tax. The physical-presence rule is based on a 1992 United States Supreme Court decision,Quill Corp. v. North Dakota, that addressed the obligations of mail-order businesses to collect sales tax on out-of-state sales; the decision has been extended to include online retailers. Generally speaking, a physical presence means having:
As you might expect, the corollary to the physical-presence rule is that, if you do not have a physical presence in the state, you generally are not required to collect sales tax for an Internet-based sale to someone in that state. Some states have adopted so-called Amazon laws which would require larger Internet sellers with no physical presence in the state to collect and pay sales tax under certain conditions.
However, because Oregon has no sales tax, these rules are not relevant to sales you make to Oregon customers.
If you find yourself wondering if anything has changed regarding Oregon sales tax, you can always check the Oregon Department of Revenue’s website. For more general information on taxes on Internet sales, see Nolo's article Sales Tax on the Internet. And, for information on the rules about collecting sales tax for Internet sales in any other state, see Nolo’s article, 50-State Guide to Internet Sales Tax Laws.
Last updated: April 13,2016