April 10, 2026
OBI is deeply disappointed by Gov. Kotek’s decision to sign SB 1507, which will increase costs for many working Oregonians and further erode the state’s business climate by disconnecting Oregon partially from the federal tax code. When the governor released her Prosperity Roadmap in December 2025, she proclaimed herself “ready to roll up our sleeves to support business and create more good paying jobs for Oregonians.” SB 1507 will have exactly the opposite effect, as businesses throughout the state have warned for months.
SB 1507 nullifies three provisions of H.R. 1 for the purposes of state taxation. One provision creates a tax deduction for interest paid on new cars, and nullifying it will further reduce the buying power of working Oregonians’ income following years of soaring inflation. The second hamstrings a Clinton-era incentive for reinvestment in small business growth – just the type of incentive policymakers who value small businesses and the jobs they create should champion. And the third allows accelerated depreciation of qualified equipment, a timing tool that allows businesses – particularly capital-intensive businesses like manufacturers – to invest in equipment that increases productivity, saves energy and allows for growth.
Targeting bonus depreciation is particularly ill-advised. Because bonus depreciation simply shifts the timing rather than the net amount of tax revenue – something that does matter to cash-strapped businesses – eliminating it will not increase net revenue flowing to the state. Moreover, the revenue in question is tied to Oregon’s general fund, which is more than fully funded for the current biennium, according to the forecast released by the state economist in February. In other words, SB 1507 discourages business investment in order to pad a general fund that already was expected to have a $200 million ending balance and a further $3.4 billion in savings and reserves.
A Dec. 3 press release from Gov. Kotek about her roadmap and council reads, “The strategy lays out three broad goals: retain and grow Oregon businesses, catalyze job creation, and accelerate Oregon’s economic growth.” SB 1507 does the opposite, yet she signed it.
Gov. Kotek deserves credit for acknowledging in her signing letter that SB 1507 “could affect Oregon’s economic competitiveness.” She also deserves credit for promising to work with the Prosperity Council to propose legislation for the 2027 session that would create “pathways toward sustained and increased investment in Oregon.”
But restoring the environment Oregon’s businesses need to create jobs will require more than process. It will require courage and action.