Oregon Tax Changes for 2026: SB 1507 & Federal Tax Disconnect Explained
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Oregon Senate Bill 1507 partially disconnects Oregon’s tax code from three provisions of the federal “One Big Beautiful Bill Act” (H.R. 1). The bill has passed both chambers and is awaiting Governor Kotek’s signature. Changes apply starting with tax year 2026.
The three disconnects: Oregon eliminates all conformity to the Section 1202 QSBS exclusion, with gains on sales on or after January 1, 2026 taxable at up to 9.9%. Bonus depreciation under IRC Section 168(k) is fully disallowed, requiring businesses to recover deductions over standard MACRS schedules. Lastly, the new federal deduction for interest on loans for U.S.-assembled personal vehicles does not apply in Oregon. Learn more by downloading our presentation.
SB 1507 takes effect for tax year 2026, with returns due in early 2027. Contact our SALT team to assess the impact before it affects your returns. Reach out to Nicholas McMahon at nmcmahon@kbfadvisory.com or George Rendziperis at grendziperis@kbfadvisory.com for specific guidance.