A group of Oregonians is organizing a referendum petition to restore two federal tax deductions after the Oregon Legislature passed SB 1507 during the 2026 legislative session. The bill, which was initially introduced as a sales tax measure, ultimately served as the vehicle for disconnecting from several provisions of H.R. 1, the 2025 federal tax bill.
The issue is significant because SB 1507 expanded Oregon’s Earned Income Tax Credit and created a new job creation tax credit but also removed certain federal deductions when calculating state income taxes. Specifically, it disconnected from three provisions: a deduction for interest on car loans, a capital gains reduction for investments in qualified small business stocks, and most notably, disconnection from 100% bonus depreciation.
The National Federation of Independent Business (NFIB) strongly opposed SB 1507. Only two specific provisions—100% bonus depreciation and the car loan interest deduction—are included in Referendum Petition 2026-303. If voters succeed in overturning these changes at the ballot box, both deductions would be restored for Oregonians.
Bonus depreciation allows businesses to deduct the full cost of equipment or machinery purchases in the year they are placed into service rather than spreading out those deductions over up to twenty years. This policy has been described as an important incentive for businesses investing in modern equipment and technology.
Petitioners hope to collect at least 100,000 signatures by June 4 to qualify their measure for inclusion on the November General Election Ballot. More information about how to participate or support this effort can be found at www.notaxor.com.
