During the 2026 legislative session, the Oregon Legislature passed SB 1507, which was originally introduced as a sales tax measure but ended up being the legislative vehicle for “disconnecting” from several provisions of H.R. 1, the 2025 federal tax bill.

The bill expanded Oregon’s Earned Income Tax Credit (EITC) and created a new tax credit for job creation. It also disconnected from three provisions of 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 strongly opposed SB 1507 – here you can review written testimony submitted by NFIB Oregon State Director Anthony Smith.

More info about Bonus Depreciation: 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 thankfully was not included in the disconnect bill) provides an incredibly helpful incentive for businesses to invest in state-of-the-art, higher efficiency, equipment and machinery.

Just two specific provisions from SB 1507 are included in Referendum Petition 2026-303. If voters are successful in overturning these tax increases, it would restore both federal tax deductions that would otherwise be denied to Oregonians when calculating their state income tax liability:

— 100% bonus depreciation

— the car loan interest deduction

Oregonians are currently organizing a referendum petition to restore these deductions until voters can have the final say. Petitioners are hoping to collect at least 100,000 signatures by the June 4, 2026 deadline to qualify for the November 2026 General Election Ballot.

You can learn more about this effort, including how to sign the petition, contribute financially, or by volunteering to collect signatures, at www.notaxor.com

*This communication is intended for NFIB members and employees.