Military Retirement in Oregon
Complete 2026 Tax Guide for Veterans
Tax-Free Military Retirement + NO Sales Tax
Double tax advantage in the Pacific Northwest
Quick Facts: Oregon for Military Retirees
Oregon Military Retirement Tax Overview
Oregon offers significant tax advantages for military retirees, including NO sales tax statewide. Veterans who served before October 1991 may qualify for full exemption. Those who served after can deduct military retirement income. Combined with zero sales tax, Oregon provides excellent overall tax benefits.
| Income Type | Tax Treatment | Notes |
|---|---|---|
| Military Retirement Pay | Exempt/Deductible | Full exemption pre-Oct 1991; deduction for others |
| VA Disability Compensation | Tax-Free | Protected by federal law |
| Survivor Benefit Plan (SBP) | Same as Retirement | Follows military retirement rules |
| Social Security | Tax-Free | Oregon exempts Social Security |
| Sales Tax | 0% - NONE | No state or local sales tax |
| Civilian Employment | 4.75% - 9.9% | Graduated rate system |
Oregon's No Sales Tax Advantage
Oregon is one of only 5 states with NO sales tax. This saves military retirees thousands annually:
Annual Savings
$2,000-$4,000/year on typical spending
Vehicle Purchase
Save $3,000+ on a $40K vehicle
Home Improvements
No tax on materials, appliances
Military Installations in Oregon
Oregon has a strong National Guard presence but no major active-duty installations. The state is close to Joint Base Lewis-McChord in Washington for commissary and exchange access.
142nd Wing
Portland International Airport
- • Oregon Air National Guard
- • F-15 Eagle fighter squadron
- • Air defense mission
- • Guard/Reserve opportunities
- • Portland metro location
Kingsley Field ANGB
Klamath Falls
- • 173rd Fighter Wing
- • F-15 pilot training center
- • Major ANG flying installation
- • Southern Oregon location
- • Affordable area to live
Camp Rilea
Warrenton (Oregon Coast)
- • Oregon National Guard training
- • Armed Forces Reserve Center
- • Beautiful coastal location
- • Conference facilities
Nearby: JBLM (Washington)
3-4 hours from Portland
- • Full commissary and exchange
- • Military healthcare
- • All base services
- • Day trip from Portland area
Cost of Living in Oregon
Oregon's cost of living varies significantly by region. Portland is expensive, but eastern and southern Oregon offer very affordable options. The lack of sales tax provides savings across the board.
| Category | Oregon | National Average |
|---|---|---|
| Overall Cost of Living | 110 (10% above) | 100 |
| Median Home Price | $480,000 | $420,000 |
| Property Tax Rate | 0.90% | 1.07% |
| Sales Tax | 0% - NONE | 7.12% |
Best Oregon Cities for Military Retirees
Portland Metro
142nd Wing, Urban Amenities
- • VA Portland Healthcare System
- • Major job market
- • Cultural amenities, food scene
- • Near 142nd Wing (ANG)
- • Higher cost of living
Salem Area
State Capital
- • Lower cost than Portland
- • State government jobs
- • Wine country access
- • VA clinic available
- • Central Willamette Valley
Bend
Central Oregon
- • Outdoor recreation paradise
- • Skiing, hiking, fishing
- • Growing tech industry
- • 300+ days of sunshine
- • Higher housing costs
Klamath Falls
Kingsley Field ANGB
- • Very affordable housing
- • Near Kingsley Field (ANG)
- • Outdoor recreation
- • Small-town atmosphere
- • Lower cost of living
VA Healthcare in Oregon
Oregon has good VA healthcare coverage with facilities throughout the state. The VA Portland Health Care System is a major teaching hospital affiliated with OHSU.
VA Medical Centers
- VA Portland Healthcare System - Full service, OHSU affiliation
- VA Southern Oregon - White City (Medford area)
- VA Roseburg Healthcare System - Southern Oregon
Community-Based Outpatient Clinics
- • Bend
- • Brookings
- • Eugene
- • Hillsboro
- • Klamath Falls
- • La Grande
- • Newport
- • Salem
- • The Dalles
Pros & Cons of Retiring in Oregon
✅ Pros
- ✓ NO sales tax - saves thousands annually
- ✓ Military retirement tax benefits
- ✓ Social Security tax-free
- ✓ Below-average property taxes
- ✓ Beautiful Pacific Northwest scenery
- ✓ World-class outdoor recreation
- ✓ Good VA healthcare system
- ✓ Mild coastal climate (west side)
- ✓ Progressive veteran benefits
❌ Cons
- ✗ High state income tax (up to 9.9%)
- ✗ Portland area expensive
- ✗ Rainy west side (8-9 months)
- ✗ No major active-duty bases
- ✗ Limited military community
- ✗ JBLM 3-4 hours from Portland
- ✗ Wildfire smoke in summer
Frequently Asked Questions
Does Oregon tax military retirement pay?
Oregon provides tax benefits for military retirees. Those who served before October 1991 may qualify for full exemption. Others can deduct military retirement income. Additionally, Oregon has NO sales tax, providing significant overall tax savings.
Why is no sales tax such a big deal?
With no sales tax, you save on every purchase - from groceries to cars to home improvements. A military retiree can save $2,000-$4,000+ annually compared to a state with 7%+ sales tax. Big purchases like vehicles save thousands immediately.
Where is the nearest military base with full services?
Joint Base Lewis-McChord in Washington is 3-4 hours from Portland and offers full commissary, exchange, and medical services. Many Oregon veterans make periodic trips for major shopping.
What property tax benefits do Oregon veterans receive?
Oregon offers property tax exemptions for disabled veterans with 40%+ rating. Exemptions range from $24,793 to $30,802 of assessed value depending on disability level and income.
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