The Oregon State Legislature adjourned sine die on March 6, concluding a 35-day session that saw the passage of two significant tax bills and amendments to proposed labor laws. The National Federation of Independent Business (NFIB) reported on Mar. 11 that the session was marked by efforts to raise taxes, which is unusual in an election year.
The session’s outcomes are important for Oregon businesses, as new tax measures and changes to employment law could affect operating costs and regulatory compliance. NFIB highlighted its opposition to Senate Bill 1507 and House Bill 4027, both of which passed despite concerns from the business community.
Senate Bill 1507 initially began as a sales tax proposal but ultimately became a vehicle for disconnecting Oregon from several provisions of the federal H.R. 1, the 2025 Federal Tax Bill. The bill expanded the state’s Earned Income Tax Credit and created a new job creation tax credit while removing deductions related to car loan interest, capital gains on small business stock investments, and most notably, disallowing full bonus depreciation for equipment purchases. NFIB testified against this measure during public hearings.
House Bill 4027 increased payroll taxes slightly for both employers and employees to provide additional funding for the Bureau of Labor and Industries (BOLI) to investigate wage-and-hour and workplace discrimination claims. NFIB raised constitutional concerns about this bill during multiple hearings, questioning whether it constituted a revenue-raising measure requiring a supermajority vote in both legislative chambers.
On labor issues, House Bill 4089 was amended after initial proposals would have imposed felony charges on business owners for unintentional payroll errors or hiring unlicensed contractors. The final version narrowed penalties to repeat offenders among licensed construction contractors who intentionally hire unlicensed labor or misuse contractor licenses with intent to deceive.
A notable development occurred when House Bill 4098 failed on the House floor. This bill would have added insurance statute violations to Oregon’s Unlawful Trade Practices Act, potentially increasing litigation and insurance premiums for consumers and businesses. Its defeat was described as one of the most bipartisan votes against a measure in recent state history.
Several other bills opposed by NFIB did not pass during the session, including proposals related to labor standards boards, estate tax increases, climate superfunds, and employer Medicaid reporting requirements.
