Comparison•2025 Tax Year•Last verified: January 2026
Oregon vs California: Side Hustle Tax Comparison 2025
Compare Oregon and California taxes for freelancers and gig workers. Both have high income taxes but Oregon has no sales tax - see which is better for your situation.
Oregon and California are neighboring West Coast states with progressive politics and high income taxes. California's rates reach 13.3%, while Oregon tops out at 9.9%—but Oregon has no sales tax, which California lacks. For side hustlers on the West Coast who don't want to leave for Texas or Nevada, understanding how these states compare is valuable.
This comparison is unique because both states have high income taxes—the question is which high-tax state costs you less.
**Why This Comparison Matters:**
Both states are high-tax, but differ in structure:
- **California top rate**: 13.3% (highest in US)
- **Oregon top rate**: 9.9% (high, but lower than CA)
- **Sales tax difference**: CA has 8.82% avg; Oregon has 0%
- **Portland vs SF/LA**: Portland is significantly cheaper
- **Same coast, different vibe**: Oregon is smaller, more laid-back
For side hustlers staying on the West Coast, Oregon typically offers meaningful income tax savings while sacrificing some of California's economic opportunity.
Side-by-Side Tax Comparison
| Metric | Oregon | California |
|---|---|---|
| State Income Tax Rate | 4.75% - 9.9% (progressive) | 1% - 13.3% (progressive) |
| Top Rate | 9.9% | 13.3% |
| Common Side Hustler Rate | 8.75% - 9.9% | 6% - 9.3% |
| Sales Tax | 0% (none) | 8.82% (avg) |
| Federal SE Tax | 15.3% | 15.3% |
| Est. Tax on $22K Side Hustle* | ~$9,875 | ~$9,996 |
| Annual Income Tax Savings (OR vs CA)* | ~$121 | — |
| Sales Tax Savings on $20K Spending | ~$1,764 | — |
| Property Tax (Avg Rate) | 0.93% | 0.71% |
*Assumes single filer with $60,000 W-2 income + $15,000 net side hustle income. Actual taxes vary based on deductions, filing status, and total income.
Oregon Analysis
**Oregon Tax Analysis for Side Hustlers**
Oregon has high income tax rates but no sales tax—a unique trade-off that benefits earners over spenders.
**Key Oregon Tax Facts (2025):**
- **Tax Type**: Progressive (4 brackets)
- **Rate Range**: 4.75% to 9.9%
- **Common Side Hustler Rate**: 8.75% to 9.9%
- **Sales Tax**: 0% (none)
- **No Local Income Tax**: Oregon cities don't add income tax
**Example**: If you earn $75,000 from your W-2 job and $22,000 from side hustle income (net of expenses) in Oregon:
- Federal SE Tax: ~$3,110
- Federal Income Tax on side income: ~$4,840
- Oregon State Tax: ~$1,925
- **Total Tax on Side Hustle: ~$9,875** (44.9% effective rate)
Oregon offers Portland's livability, no sales tax, and a smaller tech scene. The cost of living is significantly lower than the Bay Area.
California Analysis
**California Tax Analysis for Side Hustlers**
California has the highest state income tax rates in the nation, impacting side hustlers significantly.
**Key California Tax Facts (2025):**
- **Tax Type**: Progressive (9 brackets)
- **Rate Range**: 1% to 13.3%
- **Common Side Hustler Rate**: 6% to 9.3%
- **Mental Health Tax**: Additional 1% over $1 million
- **Sales Tax**: 8.82% average (state + local)
**Example**: Same scenario—$75,000 W-2 job and $22,000 from side hustle income (net of expenses) in California:
- Federal SE Tax: ~$3,110
- Federal Income Tax on side income: ~$4,840
- California State Tax: ~$2,046
- **Total Tax on Side Hustle: ~$9,996** (45.4% effective rate)
**Oregon saves you: ~$121/year** on $22,000 of side hustle income (plus sales tax savings on purchases).
California offers the Bay Area tech ecosystem, LA entertainment industry, and coastal lifestyle—but at the nation's highest tax cost.
Calculate Your Side Hustle Taxes
Use our calculator to see exactly what you'd owe in each state. Try entering your numbers, then switch between Oregon and California to compare.
Which State Is Right for Your Side Hustle?
**Oregon May Be Better If You:**
- Want lower overall tax burden (income + sales combined)
- Are drawn to Portland's livability and culture
- Don't need Bay Area or LA access for work
- Make significant purchases (no sales tax helps)
- Prefer smaller city life over major metros
**California May Be Better If You:**
- Work in tech (Bay Area ecosystem is unmatched)
- Work in entertainment (LA is the center)
- Need access to California's larger economy
- Value coastal weather over Portland's rain
- Have Prop 13 protected property
**Important Considerations:**
1. **Income tax difference is modest**: At typical side hustler income levels, Oregon saves ~$100-200/year on income tax. Not a huge difference.
2. **Sales tax savings add up**: If you spend $20,000/year on taxable goods, Oregon's no sales tax saves you ~$1,764 vs California. This can exceed income tax savings.
3. **Total tax burden favors Oregon**: When combining income tax and sales tax, Oregon typically costs less—especially for higher spenders.
4. **Portland vs Bay Area economy**: The Bay Area's tech ecosystem is vastly larger. If your freelance income depends on tech networking, California may be worth the premium.
5. **Cost of living**: Portland is significantly cheaper than San Francisco or LA, adding to Oregon's value proposition beyond taxes.
Frequently Asked Questions
Which state has lower taxes overall - Oregon or California?
Oregon typically has a lower total tax burden when combining income and sales tax. While Oregon's income tax rates are only slightly lower, the 0% sales tax (vs CA's ~9%) creates significant savings. On $22K of side hustle income plus $20K in annual purchases, Oregon saves roughly $1,900 total vs California.
Is Oregon's no sales tax a big deal?
For earners, yes. If you spend $20,000/year on taxable goods and services, Oregon's 0% sales tax saves you about $1,764 compared to California's 8.82% average. This can exceed the income tax difference, especially at moderate income levels.
Should I move from California to Oregon for tax savings?
The tax savings are real but modest—maybe $1,500-2,500/year total depending on your spending. The bigger question is whether Portland's smaller economy and job market work for your freelance career. If you can maintain your California client base remotely, Oregon offers meaningful savings plus lower cost of living.
Related Comparisons
Sources
- • Oregon Department of Revenue - 2025 Tax Rates
- • California Franchise Tax Board - 2025 Tax Rates
- • IRS Publication 334 - Tax Guide for Small Business
- • Tax Foundation - State Tax Data 2025