No Tax Clawback

Your Tax Cut Doesn’t Belong to Salem

As if Oregonians didn’t already face enough government overreach, Salem is now stealing your tax cuts–and once again limiting your opportunity to make your voice heard.

Last year, Congress passed the One Big Beautiful Bill Act (OBBBA). OBBBA eliminated taxes on tips, overtime, and social security–all crucial reforms targeted at saving working families billions of dollars in federal taxes. But the benefits to Oregonians extend beyond a federal tax cut. OBBBA also brought a state tax cut thanks to rolling conformity.

Rolling conformity means that when the federal tax base–who gets taxed and on what–is changed, the Oregon tax base updates to match the new federal tax base. In essence, the removal of taxes on tips, overtime, and social security at the federal level also brought the removal of taxes on tips, overtime, and social security at the state level. That created a massive tax cut for Oregonians.

Of course, this didn’t sit well with politicians in Salem. In response to the loss of revenue, the Legislature passed SB 1507, disconnecting the Oregon tax code from certain provisions of the federal tax code. This move effectively eliminates the state tax cut and raises taxes on Oregonians by $300 million.

SB 1507 disconnects from provisions that help small businesses the most: the auto loan interest payment deductions and the business depreciation deductions. Proponents argue these provisions were handouts to big corporations, but the disconnect disproportionately harms the thousands of Oregon small businesses that are forced to pick up the $300 million tab–not to mention the employees of these businesses that won’t see pay increases and the customers that will likely see prices increases due to a higher business tax bills.

Defending Your Tax Cut

Oregonians still have an opportunity to weigh in on the $300 million tax increase, but the timeframe is dwindling thanks to Governor Tina Kotek. During debate on the house floor, Representative Ed Diehl announced his intention to refer SB 1507 to the voters in November. OFC welcomes the effort and No Tax Oregon will stand firmly behind the signature gathering efforts of the referendum. Oregonians will have until early June–the constitutionally allotted 90 days–to collect roughly 80,000 signatures to refer SB 1507 to the November ballot.

But just like she did last fall with the Gas Tax Referendum, Governor Kotek is playing games and limiting Oregonians’ ability to participate in the democratic process. SB 1507 was passed in late February. Thanks to delay tactics and gamesmanship, the Governor has 30 days, not including weekends, to sign the bill. That puts her deadline to sign at April 17–a whole 42 days into the timeline to gather signatures. By the time the referendum is approved for circulation, petitioners will likely have less than half their constitutionally allotted time to gather signatures.

What Does the Referendum Do?

The SB 1507 referendum protects two key elements set to go away:

• The Auto Loan Interest Payment Deduction
  The auto loan interest payment deduction benefits Oregonians by lowering the overall cost of owning American-made vehicles. The savings help families keep more of their income for other needs like housing, food, and education. For working-class Oregonians in particular, the deduction would provide meaningful relief, making it easier to afford dependable transportation. Keeping the auto loan interest payment deduction promotes economic mobility and reduces financial stress.

• Accelerated Business Depreciation Deductions
  The accelerated business depreciation deductions encourage investment, support local businesses, and stimulate economic growth. It allows companies to deduct the cost of equipment, property, and other assets over time, meaning businesses can reduce their taxable income and improve cash flow. This is especially important for small and medium-sized businesses across Oregon, from rural communities to larger cities, as it frees up capital to reinvest in operations, hire employees, and expand services. In a state with diverse industries like agriculture, forestry, manufacturing, and technology, depreciation helps businesses modernize their equipment and stay competitive. It also makes Oregon a more attractive place for entrepreneurs and investors, which can lead to job creation and stronger local economies. Ultimately, this deduction supports economic resilience by enabling businesses to grow sustainably while contributing to the state’s overall financial health and stability.

Take Action

Don’t want Salem to steal your tax cut? Here’s how you can help protect it:

• Tell Us You Want to Sign
  The petition is not yet in circulation, but you can let us know you want to sign by filling out the form on NoTaxOR.com. We will let you know when the petition is available and where you can sign.
• Donate
  Contributions to No Tax Oregon, a project of Oregon Freedom Coalition, help us defend Oregon taxpayers’ dollars. DONATE NOW
• Share
  Tell friends, family, and neighbors about this initiative and why it matters for Oregon businesses, workers, and consumers.
• Stay Informed
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