Oregon Tax Changes 2026: SB 1507 and PTE-E | HelloBooks Oregon allows the tips, overtime and car loan deductions on 2025 returns, then SB 1507 disconnects some items and bans bonus depreciation from 2026.
Oregon’s rolling tie let the new federal deductions flow into 2025 returns. The 2026 legislature then pulled back, and a referendum petition targets part of that law.
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Bonus depreciation
Disallowed from 2026
Applies: Tax years 2025 to 2027From IRS.gov · checked October 10, 2026
Publication OR-17 says clients may be able to claim the same deductions for tips, overtime and passenger vehicle loan interest on the Oregon return, with limits for nonresidents. Nonresidents claiming the tip or overtime deduction use a new modification category that is not multiplied by the Oregon percentage.
SB 1507 took effect June 5, 2026. It disconnects Oregon from some of the federal changes, naming the vehicle loan interest deduction and the qualified small business stock exclusion, and disallows bonus depreciation for tax years 2026 and later. Other ties to the federal code move to December 31, 2025 or January 1, 2026.
The DOR notes that a referendum petition filed April 10, 2026 seeks to repeal the disconnection provisions. Confirm the outcome before you finalize 2026 projections for clients with large equipment purchases.
SB 1510 extends Oregon’s elective pass-through entity tax through tax year 2027.
The plain-English summary for business owners
Comparison · bonus depreciation
Comparison · Schedule 1-A at the state level
Comparison · pass-through entity tax
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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