New vehicle taxes
Two new Oregon vehicle taxes began January 1, 2018:
- The vehicle privilege tax is a tax for the privilege of selling vehicles in Oregon.
- The vehicle use tax applies to vehicles purchased from dealers outside of Oregon that are required to be registered and titled in Oregon.
One-half of 1 percent is due on the retail price of any taxable vehicle.
To be taxable, a vehicle must meet all of the following criteria:
- A January 1, 2018 or later purchase date; and
- Was driven 7,500 miles or less or sold with a manufacturer's certificate of origin (MCO/MSO)*; and
- A gross vehicle weight rating of 26,000 pounds or less; and
- Has never been registered or titled in Oregon (except as a dealer demonstrator).
*A vehicle that doesn’t have an odometer, but does have an MCO, is a taxable vehicle (See "Additional information" for a full list of vehicles subject to the tax).
Instructions and responsibilities differ between consumers, out-of-state dealers, and Oregon dealers.
Vehicles purchased outside of Oregon must have the vehicle use tax paid within 30 days of purchase, if it meets the criteria established ORS 320.410.
Some out-of-state dealers collect and remit the tax. If they do so, it will be itemized on your bill of sale as “Oregon Vehicle Use Tax.” If the dealership did not collect the tax, the consumer is required to pay it before the DMV will title and register the vehicle.
To file to pay the tax and receive the vehicle use tax payment certificate, complete the online form and submit payment. These returns cannot be filed over the phone. Once the form has been completed, a certificate containing an “L number” will be emailed to the consumer.
You must collect and remit the tax if you have a physical presence in Oregon sufficient to create a substantial nexus for tax purposes. Generally, physical presence is created by employees or independent contractors who regularly work in Oregon, or ownership of real property in Oregon.
If you don’t have a physical presence in Oregon you may still choose to collect and remit the vehicle use tax on behalf of your customers. If you collect and remit the tax, you must do so for all motor vehicles you sell that are subject to the tax.
If you collect the tax from your customers, you must:
- Separately state the amount of any tax you collect on a sales receipt or proof-of-sale document and provide it to the purchaser.
- Register for a vehicle use tax account with the Oregon Department of Revenue.
- Report and remit taxes for all qualifying motor vehicles sales on a quarterly basis.
- Submit a certificate of use tax paid to the DMV for each taxable vehicle you sell.
To register for a vehicle use tax account, go to Revenue Online and click on "Vehicle and bicycle taxes” under “Quick Links.” Beneath vehicles taxes, click on “Dealers” and select the “Vehicle Use” account.
Vehicle dealers in Oregon are responsible for paying the vehicle privilege tax on the sale price of each vehicle sold. Dealers may collect the amount of the tax from the buyer in the same manner and at the same time as the collection of document processing fees.
To register, go to Revenue Online and click on "Vehicle and bicycle taxes" under "Quick Links." Beneath vehicles taxes, click on "Dealers" and select the "Vehicle Privilege" account.
Vehicle privilege tax exemptions
- Vehicle sales to buyers who aren't Oregon residents.
- Vehicle sales to a business where the primary storage, use, or other consumption of the vehicle will be outside of Oregon.
- Vehicle sales at an event lasting less than seven consecutive days in which the public is charged admission and where vehicles are sold at auction.
- Vehicle sales in which the seller takes a resale certificate from a buyer who is ordinarily engaged in the business of selling vehicles.
Returns and payments
Returns and payments are due on or before the last day of the month following the end of each quarter. Revenue Online provides convenient tools for managing your account, including electronic return filing and payment options.
||Quarter ending date
|1st — Jan-Feb-Mar
|2nd — Apr-May-Jun
|3rd — Jul-Aug-Sep
|4th — Oct-Nov-Dec
There is a 5 percent penalty if you don't pay by the due date. A 20 percent penalty is charged for not filing a return within 30 days of the due date. Interest is added to any unpaid tax and calculated from the time the tax is due.
“Retail Sales Price” means:
The total price paid for the vehicle as it came equipped from the manufacturer.
- Any separately stated dealer preparation (Example: Clear-coating, rustproofing, etc.); and
- Transportation charges, and/or delivery fees.
- Charges for accessories, parts, add-ons, or other aftermarket products.
- Any separately stated discounts or rebates that reduce the price of the vehicle at the time of sale.
“Retail Sales Price” does NOT include the retail value of:
- Any warranties or optional maintenance contracts; or
- Gap insurance; or
- Document processing fees; or
- Registration and licensing fees; or
- ADA modifications (for sales on or after June 2, 2018); or
- Customized industrial modifications made to the chassis of medium-duty trucks with GVWR of 10,000 to 26,000 pounds (for sales on or after June 2, 2018).
The privilege and use taxes apply to sales of vehicles to lessors. The tax is calculated based on the retail sales price paid by the lessor to the dealer.
Trailers and recreational vehicles
Trailers operating with a load weight of 1,800 pounds and sold with a manufacturer’s certificate of origin (MCO) and required to be registered with the DMV are subject to the privilege and use taxes. These taxes also apply to sales of recreational vehicles, including travel trailers and fifth-wheels. The full list of vehicles subject to the privilege and use taxes is available below.
Who is a "vehicle dealer"?
You must have a valid Oregon car dealer certificate if you sell, display, offer for sale, trade, or exchange more than five motor vehicles in one calendar year.
Sales made by dealers during events that last less than seven consecutive days and in which the public is charged admission and where vehicles are sold at auction, are not taxable. Vehicle sales in which the seller takes a resale certificate from a purchaser who is ordinarily engaged in the business of selling vehicles, are not taxable.
Vehicles subject to tax
Taxable vehicle sales include vehicles with 7,500 miles or less and a gross vehicle weight rating (GVWR) of 26,000 lbs. or less, and haven't been registered in Oregon. This includes but is not limited to:
|Vehicles other than all-terrain vehicles (ORS 744.850)
||Bus trailers (ORS 801.165)
||Campers (ORS 801.180)|
|Commercial buses (ORS 801.200).
||Commercial motor vehicles (ORS 801.208)
||Commercial vehicles (ORS 801.210)|
|Electric-assisted bicycles (ORS 801.258), if sold between January 1, 2018 and June 1, 2018. After June 1, 2018, sales will be subject to the bicycle excise tax.
||Fixed-load vehicles (ORS 801.285)
||Mopeds (ORS 801.345)|
|Motor-assisted scooters (ORS 801.348)
||Motor homes (ORS 801.350)
||Motor trucks (ORS 801.355)|
Vehicle use exemptions
The only vehicle use exemptions allowed are:
- Sales of vehicles to a business where the primary storage, use, or other consumption of the vehicle will be outside of Oregon.
- Sales of vehicles at an event of fewer than seven consecutive days for which the public is charged admission and where vehicles are sold at auction.
- Vehicle sales for which the seller takes a resale certificate from a purchaser who is ordinarily engaged in the business of selling vehicles.