Comparison•2025 Tax Year•Last verified: January 2026
Washington vs Oregon: Side Hustle Tax Comparison 2025
Compare Washington and Oregon taxes for freelancers and gig workers. Washington has no income tax while Oregon rates reach 9.9% - a major difference for side hustlers.
Washington and Oregon are neighboring Pacific Northwest states with dramatically different tax philosophies. Washington has no state income tax, while Oregon has some of the highest rates in the nation (up to 9.9%). For side hustlers in Portland or Seattle, this difference can mean thousands of dollars per year.
The Portland-Seattle corridor sees significant cross-border activity, and many workers choose their home state based partly on taxes. This guide helps you understand the full picture for your side hustle.
**Why This Comparison Matters:**
The Washington-Oregon tax difference is stark:
- **0% vs 9.9%**: Washington has no income tax; Oregon's top rate is among the highest
- **Portland vs Seattle**: Both are major tech hubs with similar culture
- **Cross-border shopping**: Oregonians shop in WA for big purchases (no sales tax in OR); Washingtonians work in OR for... well, nothing tax-wise
- **Remote work implications**: Living in WA while serving OR clients maximizes savings
For side hustlers, choosing Washington over Oregon could mean keeping 8-10% more of your freelance income. The difference is one of the largest between any neighboring states.
Side-by-Side Tax Comparison
| Metric | Washington | Oregon |
|---|---|---|
| State Income Tax Rate | 0% (no income tax) | 4.75% - 9.9% (progressive) |
| Common Rate for Side Hustlers | 0% | 8.75% - 9.9% |
| State Tax Filing Required | No | Yes |
| Federal SE Tax | 15.3% | 15.3% |
| Est. Tax on $20K Side Hustle* | ~$7,226 | ~$8,976 |
| Annual Savings (WA vs OR)* | ~$1,750 | — |
| Sales Tax | 6.5% + local (up to 10.5%) | 0% (no sales tax) |
| Property Tax (Avg Rate) | 0.87% | 0.93% |
| Major Tech Hub | Seattle | Portland |
*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.
Washington Analysis
**Washington Tax Analysis for Side Hustlers**
Washington has no state income tax, making it extremely attractive for high earners and side hustlers alike.
**Key Washington Tax Facts (2025):**
- **State Income Tax**: 0%
- **Tax Type**: None
- **Filing Requirement**: No state income tax return required
- **Capital Gains Tax**: 7% on gains over $270,000 (rarely affects side hustlers)
- **B&O Tax**: Business tax, but most freelancers under threshold
**Example**: If you earn $70,000 from your W-2 job and $20,000 from side hustle income (net of expenses) in Washington:
- Federal SE Tax: ~$2,826
- Federal Income Tax on side income: ~$4,400
- Washington State Tax: $0
- **Total Tax on Side Hustle: ~$7,226** (36.1% effective rate)
Washington offers Seattle's thriving tech ecosystem (Amazon, Microsoft, many startups) with zero state income tax—a powerful combination.
Oregon Analysis
**Oregon Tax Analysis for Side Hustlers**
Oregon has a progressive income tax with rates among the highest in the nation, reaching 9.9% for most side hustlers.
**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%
- **No Sales Tax**: Oregon has no sales tax (rare)
- **Filing Threshold**: $1,000 income
**Example**: Same scenario—$70,000 W-2 job and $20,000 from side hustle income (net of expenses) in Oregon:
- Federal SE Tax: ~$2,826
- Federal Income Tax on side income: ~$4,400
- Oregon State Tax: ~$1,750
- **Total Tax on Side Hustle: ~$8,976** (44.9% effective rate)
**Washington saves you: ~$1,750/year** on $20,000 of side hustle income.
Oregon's trade-off is no sales tax (0% vs Washington's 10%+), which benefits consumers but doesn't help your side hustle income.
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 Washington and Oregon to compare.
Which State Is Right for Your Side Hustle?
**Washington May Be Better If You:**
- Prioritize keeping more of your side hustle income
- Work in tech and can tap into Seattle's larger ecosystem
- Don't mind paying sales tax on purchases
- Want to eliminate state income tax filing entirely
- Are a high earner (the more you earn, the more you save)
**Oregon May Be Better If You:**
- Value no sales tax (saves money on large purchases)
- Have roots in Portland and don't want to relocate
- Work in industries centered in Portland
- Prefer Portland's smaller-city feel vs Seattle
- Are lower income (Oregon's lower brackets are reasonable)
**Important Considerations:**
1. **The income tax difference is huge**: 9%+ difference on side hustle income adds up fast. On $30,000 of freelance income, you'd save ~$2,700/year in Washington.
2. **Sales tax trade-off**: Oregon's no sales tax saves on purchases, but you'd need to buy a lot to offset $1,750+ in income tax. The math almost always favors Washington for workers.
3. **Cross-border arbitrage**: Some people live in WA (no income tax) and shop in OR (no sales tax). This is legal and maximizes savings.
4. **Portland vs Seattle careers**: Seattle has a larger tech ecosystem (Amazon, Microsoft) but Portland has significant tech presence too. Both cities have similar culture.
5. **Capital gains consideration**: Washington's 7% capital gains tax on gains over $270,000 could matter if you're planning to sell a business or have significant stock options.
6. **Vancouver, WA option**: Vancouver, WA is just across the river from Portland, OR. You can live in Washington (no income tax), work remotely, and enjoy Portland's amenities with easy access.
Frequently Asked Questions
How much will I save living in Washington vs Oregon for my side hustle?
The savings are substantial. On $20,000 of net side hustle income, you'd save approximately $1,750/year. On $40,000, you'd save ~$3,500/year. This is because you're avoiding Oregon's 8.75-9.9% tax entirely. Over 5 years, that's $8,750-$17,500+ more in your pocket.
Should I live in Vancouver, WA to avoid Oregon taxes?
Vancouver, WA is a popular choice for exactly this reason. You get Washington's zero income tax while being minutes from Portland. You can enjoy Portland's restaurants, culture, and amenities while paying Oregon's 0% sales tax on purchases there. It's a legitimate tax optimization strategy used by many.
Does Oregon's no sales tax make up for the high income tax?
For most workers, no. To offset $1,750 in income tax savings (on $20K freelance income), you'd need to spend over $17,500 on taxable goods in Washington (at 10% sales tax). Most people don't spend that much on taxable items annually. The income tax difference almost always matters more than sales tax.
Related Comparisons
Sources
- • Washington State Department of Revenue
- • Oregon Department of Revenue - 2025 Tax Rates
- • IRS Publication 334 - Tax Guide for Small Business
- • Tax Foundation - State Tax Data 2025