NFIB Oregon State Director Anthony Smith reports from Salem on the first week of the 2026 session

February 6 was Day 5 of the 35-day 2026 Oregon Legislative Session and there’s already a lot to report. It’s safe to say that if even-number-year “short” sessions were ever portrayed as budget-only focused, that illusion is officially dead and gone. Nearly 300 bills have been introduced, and legislators have wasted no time getting back to work.

In the first four days, NFIB officially weighed in on seven bills. The bad news is that we opposed every single one. With affordability top of mind for Oregon households and small businesses, it’s extremely disappointing to see so many legislative measures that would increase costs and further weaken Oregon’s already fragile economy and business climate.

The good news is we were absolutely prepared for all these threats. On Day 1, NFIB deployed a series of small business action alerts on five issues of top concern. Thanks to NFIB members taking action, these alerts have generated hundreds of messages to Oregon legislators urging them to oppose legislation that is harmful to Oregon’s small business.

Here’s what’s been happening in the Oregon Capitol so far:

Federal Tax Conformity

There are two bills NFIB is currently tracking that are relating to how Oregon’s state income tax code interacts with the federal tax code. The first bill is HB 4015. It’s bill that simply updates some dates in Oregon tax law and aligns Oregon with the Internal Revenue Code (IRC). So long as there are no anti-business amendments proposed, NFIB would support that measure.

However, it seems there is little interest in that bill. The bill that is getting all the attention is SB 1507, a bill that was originally introduced as a measure about a new sales tax, but is now the legislative vehicle for a federal disconnect. Senate Finance and Revenue Committee Chair Anthony Broadman (D-Bend) and House Revenue Committee Chair Nancy Nathanson (D-Eugene) released their tax plan on Day 1 of session. It disconnects from three provisions of the 2025 Federal Tax Bill (H.R. 1):

— a deduction for interest on car loans ($36 million)

— a capital gains reduction for taxpayers who invest in qualified small business stocks ($39 million)

— and most notably, a disconnection from 100% bonus depreciation ($267 million).

NFIB testified in opposition during a public hearing on February 4.

100% bonus depreciation is a mechanism by which a business can purchase a piece of equipment or machinery and deduct the full cost of the purchase in the year it was placed in service rather than spreading that deduction out over the full depreciation schedule, which can be up to 20 years. This tax policy (along with Section 179 small business expensing, which is not part of the disconnect) provides an incredibly helpful incentive for businesses to invest in state-of-the-art, higher efficiency, equipment and machinery.

The amendments to SB 1507 also expand Oregon’s earned income tax credit for low-income workers and creates a cumbersome new tax credit for businesses that create jobs. It appears the business would have to first apply for the $1,000 per job credit with Business Oregon and then hope they get approved before the money runs out. Small businesses aren’t going to make hiring decisions based on a temporary tax credit program that requires them to first jump through hoops and then hope for the best. In most cases, especially for growing and expanding businesses, a permanent bonus depreciation policy would be much more valuable.

For more information about this proposal, you can read news articles here by Oregon Public Broadcasting and The Oregonian/OregonLive. But what reporters almost never mention is that when taxpayers utilize tax policies like 100% bonus depreciation, it comes with pros and cons. They get a large deduction in the first year, resulting in a lower tax liability, but for up to 20 years, they will pay more taxes than they would have had they not already used the full value of their deduction.

Importantly, (and this is what most lawmakers fail to understand) the state does not lose revenue in either scenario, just like the taxpayer does not get a tax break in either scenario. It’s all a matter of when the taxes are owed. Consequently, if the Legislature chooses to disconnect from bonus depreciation, it will result in a short-term revenue increase for the state at the expense of future state budgets up to 20 years in the future for as long as we remain disconnected.

SB 1507 is scheduled for a work session on Monday, February 9 at 8 a.m. in the Senate Committee on Finance and Revenue.

Raising Taxes on Employers and Employees to Fund BOLI

While we’re on the subject of taxes (we’ll focus on labor/employment issues in a future update), the Oregon Legislature is considering two identical bills that would increase payroll taxes for businesses and their employees. That new money would go to the Bureau of Labor and Industries (BOLI) so the agency can investigate wage-and-hour and workplace discrimination claims.

SB 1506 and HB 4027 are both placeholder bills. They each have a proposed “gut & stuff” amendment that replaces the original language of the bill with the new language that raises taxes and directs where the money will go. The payroll tax in question is the Workers’ Benefit Fund assessment, which is currently 1.8 cents per hour worked, per employee, split evenly between employers and employees.

As NFIB noted during the public hearing on SB 1506 on February 4, the Workers’ Benefit Fund (WBF) supports programs specifically related to injured workers. When an injured worker has a discrimination claim based on the worker’s status as an injured worker, the WBF pays BOLI to investigate the claim, but that’s where BOLI’s nexus to the WBF starts and stops. If the Legislature wants to provide additional resources to the bureau, it can do it in a myriad of  ways, for example: lawmakers can prioritize the agency’s work with existing General Fund dollars (and to put that in perspective, Ways & Means spent $1 billion from the General Fund in the final appropriations bill of the 2025 legislative session) or the Legislature can propose a new tax to raise revenue sufficient to pay for the agency’s work.

Furthermore, according to the Oregon Constitution, a bill for raising revenue must start in the Oregon House of Representatives and it must pass in both chambers of the Legislature by a three-fifths supermajority. Typically, when a bill is identified by its drafters as a bill for raising revenue, a note is added in the relating-to clause designating it as measure that requires this vote threshold.

SB 1506 is (obviously) a Senate Bill and it does not include a three-fifths requirement. This language is also not included in the amendments, probably because Legislative Counsel went on the record in a legislative committee hearing last month to say this bill for raising revenue to fund a state agency’s core services, is not a bill for raising revenue.

Today, the Legislature is looking to use the Workers’ Benefit Fund’s taxing authority to raise revenue for BOLI. Tomorrow the need could be for ODOT, or PERS, or public education, or Medicaid, or SNAP. The Worker’s Benefit Fund, nor its taxing mechanism, should be used as a piggy bank for anything and everything the Legislature wants to fund, without having to tap into the General Fund.

SB 1506 is scheduled for a work session in the Senate Committee on Labor and Business on February 9, 1 p.m. HB 4027 is scheduled for a public hearing later that afternoon at 3 p.m. in the House Committee on Labor and Workforce Development. NFIB will be there to oppose the bill.