SB 1507 Signed: QSBS Impact for Oregon
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Governor Tina Kotek has signed Senate Bill 1507 into law, decoupling Oregon from several federal tax provisions, including the Qualified Small Business Stock (QSBS) exclusion under IRC Section 1202 and bonus depreciation under IRC Section 168(k).
For most businesses, the immediate tax impact stems from the loss of bonus depreciation. For founders and investors, the QSBS decoupling carries significant consequences in addition to the bonus depreciation decoupling.
In her letter to the Secretary of State, Governor Kotek acknowledged that these decouplings “could affect Oregon’s economic competitiveness” and recognized their particular impact on small businesses and startup companies. She committed to working with her Prosperity Council to develop and propose QSBS-specific legislation for the 2027 legislative session.
SB 1507 is effective 91 days after the Legislative Assembly adjourns, but will apply retroactively to tax years beginning on or after January 1, 2026. The governor has indicated the 2027 legislative session as the next opportunity to address this. Founders, investors, and businesses with Oregon tax exposure should review how these changes affect current-year planning and longer-term tax positions.
KBF will continue to monitor developments and provide updates as they become available. Contact your engagement team leader or our SALT team to discuss the implications for your specific situation. Reach out to Nicholas McMahon at nmcmahon@kbfadvisory.com or George Rendziperis at grendziperis@kbfadvisory.com for guidance.