Oregon's vehicle taxes
Two 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 (.005) is due on the retail price of any taxable vehicle.
What is a taxable vehicle?
To be taxable, a vehicle must meet all of the following criteria:
- Purchased from a dealer or someone who is or would be required to be registered as a dealer in Oregon; and
- 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).
This includes but is not limited to:
|Vehicles other than all-terrain vehicles (ORS 744.850)
||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. Beginning June 2, 2018, sales are subject to the bicycle excise tax.|
|Fixed-load vehicles (ORS 801.285)
||Mopeds (ORS 801.345)
||Motor homes (ORS 801.350)|
|Motor trucks (ORS 801.355)
||Tank vehicles (ORS 801.522)
||Trailers required to be registered in Oregon (ORS 801.560 and 803.305)|
*A vehicle that doesn’t have an odometer, but does have an MCO, is a taxable vehicle.
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 in ORS 320.410. For more information and a flowchart to determine if vehicle use tax is due, please see the Oregon vehicle use tax information publication.
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, you are required to pay it before the Oregon 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. The DMV will visually verify this L number.
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 purchase date. Interest is added to any unpaid tax and calculated from the time the tax is due.
If you purchase a taxable vehicle from an Oregon dealer, the dealer is responsible for the tax but may pass on the amount to you. If this is the case it will be itemized on your purchase documents. Purchases from Oregon dealers do not require a Use Tax Certificate prior to being titled and registered.
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. You may include the certificate with your other title and registration documents that are sent to the DMV.
To register for a vehicle use tax account, go to Revenue Online. Click on "Register for vehicle and bicycle tax" in the Register & Apply section. Beneath vehicles taxes, click on "Dealers" and select the "Vehicle Use" account.
Vehicle use tax exemptions
The only exemption from vehicle use tax allowed is:
Vehicle sales for which the seller takes a resale certificate from a purchaser who is ordinarily engaged in the business of selling vehicles.
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. Click on "Register for vehicle and bicycle tax" in the Register & Apply section. 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.
- Cash down payments and trade in values do not reduce the retail sales price of the vehicle.
"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 "agreed upon value of the vehicle" as stated in the lease agreement.
Trailers and recreational vehicles
Trailers 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 that meet the taxability criteria. The full list of vehicles subject to the privilege and use taxes is available above.
Who is a "vehicle dealer"?
Oregon Revised Statute (ORS) 822.005 requires that a person must be a certified dealer to display vehicles for sale or sell vehicles unless exempted under ORS 822.015.