Direct Indexing in Oregon: 33.7%–37.7% Combined Capital Gains Tax

Oregon taxes capital gains as ordinary income — no preferential rate. The top state rate is 9.9% on income above $125,000 (single) or $250,000 (married). Portland metro residents add the Metro Supportive Housing Services (SHS) tax at 1%, and Multnomah County residents add the Preschool for All (PFA) tax at 1.5%–3%. For a high-income Portland investor, the combined long-term capital gains rate reaches 37.7% — higher than California and rivaling New York City. For Nike and Intel employees, OHSU physicians, Oregon founders, and remote workers who relocated from the Bay Area, that combined rate makes direct indexing far more valuable than in states with no capital gains exposure. Here's the full picture.

Oregon's capital gains treatment: no preferential rate

The federal government taxes long-term capital gains at preferential rates — 0%, 15%, or 20% depending on taxable income — that are separate from and lower than ordinary income tax rates. Oregon does not have this distinction. Oregon taxes long-term capital gains as ordinary income using the same four-bracket progressive structure applied to wages, salaries, and business income.¹

Oregon's 2026 state income tax rates:

The $125,000/$250,000 thresholds for the 9.9% rate are set by statute and not inflation-adjusted. The lower bracket thresholds are approximately 2025 values and are adjusted annually for inflation by the Oregon Department of Revenue.¹

For investors with income above the 9.9% threshold — which describes virtually every investor with $500K+ in taxable capital gains — every dollar of long-term capital gain adds 9.9 cents of Oregon income tax, identical to an extra dollar of salary.

Portland-specific local taxes: Metro SHS and Multnomah County PFA

Oregon residents in the Portland metro area face two additional income taxes stacked on top of the state rate. These taxes apply to all income — including capital gains — and are separate from each other and from the state tax.²³

Metro Supportive Housing Services (SHS) Tax

The Metro SHS tax applies to residents and workers in the three-county Portland metropolitan area (Multnomah, Washington, and Clackamas counties). For 2026:

• Rate: 1% on Metro taxable income above the threshold
• 2026 threshold: $128,000 (single) / $205,000 (joint) — inflation-adjusted starting 2026²
• Coverage: Portland, Beaverton, Hillsboro, Lake Oswego, Gresham, and most of the surrounding metro area

Multnomah County Preschool for All (PFA) Tax

The PFA tax applies only to Multnomah County residents (and Multnomah County source income for non-residents). For 2026:

• Rate: 1.5% on income above $125,000 (single) / $200,000 (joint); an additional 1.5% — total 3% — on income above $250,000 (single) / $400,000 (joint)
• Planned rate increase to 2.3% was delayed: A scheduled January 2026 rate hike was postponed; the increase to 1.5%→2.3% is expected in 2027 instead³
• Coverage: Multnomah County residents — which includes the City of Portland proper

The result: a Multnomah County resident working in Portland owes all three taxes on capital gains. A resident of Washington County (Beaverton, Hillsboro) owes state + Metro SHS but not Multnomah PFA.

Combined long-term capital gains rate by location

Federal LTCG and NIIT at the 20%+3.8% top bracket (taxable income above $545,500 single / $613,700 MFJ for 2026⁶) stack with Oregon local rates as follows:

For context: California's combined rate is 37.1% (20% + 3.8% + 13.3% CA). New York City's combined rate is 37.3%–38.6%. Portland's top bracket at 37.7% puts it in the same tier as the country's two most-cited high-tax jurisdictions.

Break-even table: Oregon vs. no-state-tax

Annual net benefit of direct indexing, assuming a 1.5% annual harvest rate and 0.25% fee premium over a low-cost ETF. Based on 2026 combined rates.

Assumes 1.5%/year gross harvest rate and 0.25% DI fee premium over a low-cost ETF. Portland/Multnomah uses 37.7% combined (9.9% OR + 1% SHS + 3% PFA top tier + 23.8% federal). TX/FL uses 23.8% federal only. Harvest rates vary with market conditions; 1.5% is an industry midpoint estimate. "Portland net" shows Portland/Multnomah benefit after the 0.25% fee. These are estimates, not guarantees.

Nike, Intel, and OHSU: Oregon's RSU and equity-comp audience

Nike (Beaverton)

Nike's world headquarters is in Beaverton, Washington County — inside the Portland metro SHS jurisdiction but outside Multnomah County. Nike executives, brand managers, and senior designers with RSU compensation face a combined LTCG rate of 34.7% when selling appreciated shares. Key planning considerations:

• Employer-stock exclusion screen: A DI portfolio must exclude NKE (Nike) shares. Nike employees who receive RSU grants and later sell older appreciated Nike shares need cross-account wash-sale monitoring to avoid disallowance from ongoing vest activity.
• Long-term accumulated positions: Many longtime Nike employees have substantial appreciated NKE built up over years of vesting. A loss bank built over 12–18 months in a DI separately managed account can meaningfully offset a concentrated-stock diversification event at the 34.7% combined rate.
• Washington County vs. Portland: Beaverton-based Nike employees owe Metro SHS (1%) but not Multnomah County PFA. Their combined rate is 34.7%, not 37.7%. Employees who live in Portland proper (Multnomah County) owe both.

Intel (Hillsboro)

Intel's largest manufacturing campus is in Hillsboro, Washington County — the same Metro SHS jurisdiction as Nike. Intel employees with INTC RSUs or equity grants face the same 34.7% combined rate for Hillsboro residents. The DI strategy mirrors the Nike approach:

• Intel INTC exclusion screen: Ongoing INTC vesting requires the DI account to exclude Intel stock across all accounts to prevent cross-account wash-sale disallowance.
• RSU vs. NQSO mechanics: Intel has historically issued a mix of RSUs and non-qualified stock options. RSU vesting is ordinary income; LTCG arises only when you sell appreciated post-vest shares after 12 months. NQSO exercise creates ordinary income at exercise — DI cannot offset that directly, but builds a loss bank to offset future LTCG from sales of appreciated exercised shares. See the NQSO guide for the full mechanics.

OHSU (Oregon Health & Science University)

OHSU physicians, researchers, and administrators in Portland are Multnomah County residents and face the full 37.7% combined rate. High-income physicians with taxable investment accounts benefit from DI because their combined income — clinical salary plus investment income — keeps them firmly in the 9.9% Oregon bracket plus both local surcharges. Medical practice K-1 income and sale proceeds from private practice ownership are common DI coordination points. See the K-1 income DI guide for the mechanics.

Oregon's $1 million estate tax: the §1014 step-up interaction

Oregon imposes a state estate tax starting at a $1 million taxable estate — far below the federal $15 million exemption under OBBBA (July 2025). The Oregon estate tax rate is graduated from 10% to 16% on amounts above $1 million.⁴

Note: As of June 2026, multiple bills to raise Oregon's $1 million threshold are pending in the Oregon legislature (including SB 1511, which passed the Senate and would raise the threshold to $2.5 million starting 2027, and HB 2301, which would raise it to $7 million). None had been signed into law as of this writing. Oregon residents with estate planning concerns should monitor legislative developments with a local estate attorney.

The direct indexing coordination with Oregon estate tax:

• §1014 step-up is still federal law. DI positions that pass to heirs at death receive a stepped-up cost basis to fair market value. This eliminates all embedded capital gains — at the combined 33.7%–37.7% rate — for the heir. Oregon does not impose a separate capital gains tax at death; the heir who later sells inherited DI lots pays Oregon income tax only on appreciation after the inheritance date.
• Harvest losses now; let winners compound to the step-up. The standard DI tax optimization strategy — systematically harvesting losses while holding winners — is especially powerful in Oregon. Harvested losses are worth 33.7%–37.7% per dollar today. Highly appreciated winners held until death generate zero lifetime capital gains tax on all accumulated growth, effectively a permanent 0% rate on that appreciation in Oregon.
• Estate tax on value vs. gains. Oregon's estate tax is levied on total estate value, not on unrealized gains specifically. Appreciated DI positions increase estate value and thus Oregon estate tax exposure. For estates approaching the current $1 million threshold, the tradeoff between capital gains savings (from holding appreciated DI lots) and estate tax on that value should be modeled explicitly by an advisor. This is the kind of multi-tax coordination that distinguishes a specialist from a generalist.
• DAF gifting from appreciated DI lots. Donating appreciated DI lots directly to a donor-advised fund eliminates the capital gain entirely and generates a charitable deduction — reducing both income tax and potentially the taxable estate. See the DI charitable giving guide for the full mechanics.

QSBS in Oregon: federal §1202 conformity

Oregon conforms to the federal qualified small business stock (QSBS) exclusion under IRC §1202. Oregon-based founders and early employees who hold QSBS meeting the five-year holding requirement can exclude qualifying gains from both federal and Oregon state income tax, subject to the OBBBA-updated federal limits: $15 million or 10× adjusted basis, with 50/75/100% exclusion at 3/4/5-year hold.⁵

This is a meaningful advantage over California, which specifically does not conform to §1202 and taxes 100% of QSBS gains at the full California state rate (13.3%). Oregon founders with qualifying QSBS can potentially exclude the full gain at both the federal and state level — making the DI question for QSBS different: the primary DI role shifts to offsetting the non-QSBS portions of a sale (§1245 recapture, non-qualifying tranches, earn-out payments) rather than the core gain.

For founders with a mix of QSBS and non-qualifying equity, a direct indexing loss bank can absorb the taxable remainder. See the business sale DI guide for the full framework.

Relocating from California: the Oregon comparison

Many California residents have relocated to Oregon over the past several years, drawn by lower housing costs and quality of life. The tax comparison is less favorable than it appears:

The net result: California relocators who move to Portland/Multnomah County exchange a slightly higher income tax rate (13.3% CA vs. 13.9% effective local in Portland/Multnomah top bracket) for no sales tax and QSBS conformity — but gain an Oregon estate tax exposure they likely didn't have in California. Relocating to Oregon is not a tax escape for high-income capital-gains earners in the way that relocating to Texas or Nevada would be.

Platform selection for Oregon investors

All major direct indexing platforms serve Oregon investors. Key considerations:

• Parametric Portfolio Associates (advisor-only, ~$250K+ minimum, 0.20–0.35% platform fee): Best for Oregon investors with cross-account complexity — RSU vesting at Nike/Intel, K-1 income from private equity, or multi-custodian concentrated positions. Cross-account wash-sale coordination is only fully reliable with advisor-managed platforms like Parametric or Aperio. The Portland-metro Nike/Intel employee base is a core Parametric use case.
• Aperio (BlackRock) (~$1M+ minimum, advisor-only): Adds deep ESG customization relevant for Oregon investors with specific screens — labor rights, environmental, or sector exclusions. Also suited for large accounts ($2M+) with complex needs like the 130/30 long-short extension strategies.
• Vanguard Personalized Indexing (~$250K minimum, 0.20% platform fee): Strong entry point for Oregon investors with straightforward equity situations — no employer-stock wash-sale complexity, no K-1 income from multiple partnerships. Cost-efficient relative to the DI alpha available at Oregon's 33.7%+ combined rate.
• Schwab Personalized Indexing / Wealthfront ($100K minimum): Practical for Oregon investors who don't hold employer stock in multiple custodian accounts. Their wash-sale monitoring only covers holdings within their own platform — Nike or Intel RSU holders who receive ongoing stock grants must use advisor-coordinated platforms for complete cross-account protection.
• Frec ($20K minimum, 0.09%): Lowest-cost entry point, positive net value even at Oregon's 33.7%+ rate with smaller taxable accounts.

Sources

1. Oregon Department of Revenue — Personal Income Tax. Oregon taxes personal income — including capital gains — at four progressive rates: 4.75%, 6.75%, 8.75%, and 9.9%. No preferential capital gains rate. The 9.9% rate applies to Oregon taxable income above $125,000 (single) / $250,000 (MFJ); those thresholds are set by statute. Lower bracket thresholds are inflation-adjusted annually by the Oregon DOR. Rates confirmed for tax year 2026.
2. Metro (Portland) — Supportive Housing Services Tax FAQ. Metro SHS personal income tax: 1% on Metro taxable income above the annual threshold. For 2026, the threshold is $128,000 (single) / $205,000 (joint), inflation-adjusted beginning with tax year 2026. Applies to residents, workers, and those with income sourced in the three-county metro area (Multnomah, Washington, and Clackamas counties).
3. Multnomah County — Preschool for All Personal Income Tax. PFA tax: 1.5% on Multnomah County taxable income above $125,000 (single) / $200,000 (joint); additional 1.5% — total 3% — on income above $250,000 (single) / $400,000 (joint). The planned rate increase to 2.3% in January 2026 was delayed; increase of 0.8% expected in 2027. Applies to Multnomah County residents and non-residents with Multnomah County source income.
4. Oregon Department of Revenue — Estate Transfer Tax. Oregon estate tax applies to estates above $1 million. Rate is graduated from 10% to 16% on amounts exceeding $1 million. As of June 2026, the $1 million threshold remains current law; legislative proposals to raise the threshold (SB 1511, HB 2301) are pending but none have been signed into law. Oregon estate tax is separate from the federal estate tax (OBBBA: $15 million federal exemption) and from capital gains taxes.
5. Tax Foundation — State Income Tax Rates 2026. Oregon: 4.75%–9.9% on ordinary income and capital gains (no preferential capital gains rate). Oregon conforms to federal §1202 QSBS exclusion, unlike California, which specifically does not conform (R&TC §18152.5). Combined LTCG rate for Portland/Multnomah top bracket: approximately 37.7% (23.8% federal + 9.9% OR + 1% SHS + 3% PFA).
6. IRS Rev. Proc. 2025-32 — 2026 Federal Tax Thresholds. 2026 federal long-term capital gains rate thresholds: 20% rate begins at $545,500 (single) / $613,700 (MFJ); 15% rate begins at $49,450 (single) / $98,900 (MFJ). NIIT (3.8%) threshold: $200,000 (single) / $250,000 (MFJ), not inflation-adjusted per IRC §1411. Federal LTCG + NIIT at top bracket: 23.8%.

Oregon state income tax rates and local tax rates verified against Oregon Department of Revenue guidance and Metro/Multnomah County official sources as of June 2026. Oregon estate tax threshold ($1M) reflects current law; legislative proposals to raise the threshold are pending as of June 2026 and are not reflected in the analysis. Federal LTCG thresholds per IRS Rev. Proc. 2025-32. Harvest rate estimates (1.5%/year) are industry midpoint figures and vary with market conditions. This page is informational only and does not constitute financial, tax, or legal advice. Consult a CPA, tax attorney, or fee-only financial advisor for your specific situation.