2026 Summary of Legislation

Department of Revenue at the Capitol

Bill Information

Department of Revenue at the Capitol

During legislative sessions, the Department of Revenue (DOR) reviews bills, amendments, and policy proposals with the intent to provide feedback about administrative issues that may affect taxpayers, customers, and the department. Many proposals do not affect department operations or taxpayer communications, but some bills require amendments to clarify administrative direction.

The department administers more than 60 revenue streams that support government programs, and we are committed to bringing in the revenue Oregon counts on.

Four primary divisions in the department review legislative proposals and amendments that impact some of the following topics:

Business Division: Corporate Activity Tax, estate tax, marijuana and tobacco issues
Collection Division: Collections and garnishments on tax debts and other agency accounts
Personal Tax and Compliance Division: New and existing tax credits, kicker payments
Property Tax Division: Exemptions, definitions, bills impacting local budget law and meetings

In 2026, during the 33-day legislative session, 304 bills were introduced for consideration. The department monitored more than one quarter of them to determine their potential impact to Revenue programs.

Department staff initiated contact about bills, amendments, and meetings and were able to resolve issues productively with legislators, their staff, and other partners. Department representatives attended committee meetings to describe the administrative impact of proposals and offer observations and suggestions on the record.

Some bills that were ultimately approved may have an impact on customers of the department. Examples include:

Senate Bill 1501 requires employers to separately report employee withholding amounts associated with work in the Rose Quarter
Senate Bill 1507 modifies Oregon's connection to federal tax law, expands the Oregon Earned Income Credit program, and establishes a new jobs tax credit
Senate Bill 1510 extends the Pass-Through Entity Elective (PTE-E) tax credit program
House Bill 4016 requires providers with state contracts greater than $250,000 to show compliance with state tax law
House Bill 4134 increases the Statewide Lodging Tax and expands distribution of the revenue to wildlife and natural resource projects

About the 2026 Summary of Legislation

The Department of Revenue Summary of Legislation:

Serves as a quick reference for some legislation that may affect external partners, the public, and department staff.
Documents legislative conversations between the department and committees.

Identifies notable bills that passed.
Identifies notable bills or amendments that were introduced, but did not pass.

For each bill, we provide a brief summary of the bill, effective/operative date (if applicable), and a link to bill information on the legislative website. The legislative website includes bill text, amendments, analysis, testimony, and votes.

What's Next – 2026 Interim and Beyond

The department will work to implement recently approved legislation. Some changes will require a robust plan for customer communications, changes to forms or administrative rules, and technology enhancements. Other bills may require minor updates to forms and process. To prepare for the 2027 legislative session, the department will engage with the Governor's Office, the Oregon Department of Administrative Services (DAS), and external partners as new legislation is drafted to reflect new or unresolved topics.

Bill Information

Effective Dates: The effective date of a bill establishes when new provisions of law will take effect. “Except as otherwise provided in the Act, an Act of the Legislative Assembly takes effect on January 1 of the year after passage of the Act" (ORS 171.022). Some bills contain a clause that specify a particular effective date; others may have emergency, sunset, or referendum clauses attached.

Applicability: While an effective date or emergency clause may determine when new provisions of law take effect, the department must also be aware of the tax year a bill may apply to. Depending on the legislation, a taxpayer may be able to file an amended return to take advantage of the law.

Senate Bill 1501 – Moda Center and Oregon Arena Fund – Business Division and Research Section

OR Laws 2026, Chapter 74
Effective Date: March 31, 2026

Senate Bill 1501 authorizes DAS to negotiate and enter into agreements with other public entities to create a joint authority to own and operate the Moda Center in Portland. It creates a separate account - the Oregon Arena Fund – to receive appropriations and pay expenses related to construction, renovation, and maintenance of the Moda Center through DAS.

Beginning September 1, 2027, and each quarter after, DOR is required to determine wage withholdings from employers for work in the Rose Quarter and for construction on improvements to the Moda Center. Beginning July 1, 2028, and each July after, the Office of Economic Analysis (OEA) is required to estimate taxes performers paid on income from Rose Quarter performances during the past 12 months. DAS will transfer an amount equal to the OEA estimate to the General Fund for the Oregon Arena Fund. DOR and DAS may require specific reporting from certain taxpayers needed to comply with provisions of the bill.

Senate Bill 1507 – Modifies connections to federal tax law, increases the Oregon Earned Income Credit, establishes a new tax credit for specified job creation, and other changes – Business Division and Personal Tax and Compliance Division
OR Laws 2026, Chapter 142
Effective Date: June 5, 2026*

Governor Kotek SB 1507 Signing Letter – April 9, 2026

Senate Bill 1507 disconnects Oregon tax laws from some of the federal tax code changes in H.R. 1 (2025), including the federal deduction for vehicle loan interest, qualified small business stock exclusion, and disallows bonus depreciation for tax years 2026 and later. Other connections to federal tax code are updated to December 31, 2025, or to January 1, 2026.

The Oregon Earned Income Credit is increased from 9 to 14 percent of a taxpayer's federal credit or increased from 12 to 17 percent for taxpayers with a dependent under the age of three.

It creates a new personal and corporate tax credit for taxpayers who create a new job(s) in Oregon for tax years 2026 through 2031. The credit is $1,000 for each job created and limited to 10 jobs per taxpayer that meet conditions for compensation and certification as established by the Oregon Business Development Department. Total program tax credits are limited to $12.5 million for each of the tax years.

*On April 10, 2026, chief petitioners filed a referendum petition that proposes to repeal portions of SB 1507 that disconnect from certain provisions of federal tax code. Signatures for the petition are due by June 4, 2026.

Senate Bill 1510 – Technical fixes and minor policy changes – Business Division, Personal Tax and Compliance Division, and Property Tax Division
OR Laws 2026, Chapter 75
Effective Date: June 5, 2026

Senate Bill 1510 was requested by the Senate Committee on Revenue and makes technical fixes and minor policy updates to limited tax statutes. Of note, the bill extends the PTE-E tax program through tax year 2027, expands the tax credit for film production to production of commercials, and requires the State Board of Tax Practitioners to register as persons authorized by the IRS to represent taxpayers as enrolled agents.

Senate Bill 1556 – Representation of individuals in the Magistrate Division of the Oregon Tax Court – All divisions
OR Laws 2026, Chapter 87
Effective Date: June 5, 2026

Senate Bill 1556 was introduced at the request of the Oregon Judicial Department. The Oregon Tax Court has jurisdiction for appeals under state and local tax law or actions taken by DOR, counties, or the Portland Revenue Division. The Magistrate Division of the Tax Court handles some tax disputes and provides mediation. Their decisions may be appealed to the Regular Division of the Tax Court.

The bill is the result of an interim workgroup related to who may represent a taxpayer in Magistrate cases, and to help people understand that the Magistrate Division and DOR are different entities with different procedures. The bill requires that a representative recognized by the Magistrate Court must also be recognized by DOR for the same case, but the bill does not change DOR's ability to determine acceptable representatives for an audit or other administrative proceeding.

Senate Bill 1599 – Election date of transportation referendum – Business Division
OR Laws 2026, Chapter 1
Effective Date: March 2, 2026

Senate Bill 1599 establishes the election date of May 19, 2026, for the referendum of portions of House Bill 3991, a transportation package adopted in 2025. A provision of House Bill 3991 increases the Statewide Transit Tax administered by the department. Based on the outcome of the May 2026 election, the department is ready to implement the tax increase, or not.

House Bill 4004 – Douglas fir mortality and Small Tract Forestland special assessment program – Property Tax Division
OR Laws 2026, Chapter 29
Effective Date: June 5, 2026

House Bill 4004 defers required taxes if a landowner in the Small Tract Forestland (STF) special assessment program cannot meet forest requirements, established by the State Forester, due to Douglas fir mortality. The deferred taxes will be due if the forestland is disqualified from the STF program for other reasons.

Landowners of 10 to 4,999 acres of Oregon forestland may have special assessments under the Westerns or Eastern Private Forestland program, or the Small Tract Forestland program. Land in the STF program is assessed at 20 percent of what the specially assessed value would be under the Western or Eastern program, depending on geography. House Bill 4004 modifies provisions of the STF program.

House Bill 4016– Public contractor compliance with tax programs – Personal Tax and Compliance Division, Business Division, and Collection Division
OR Laws 2026, Chapter 102
Effective Date: June 5, 2026

House Bill 4016 requires the department to determine tax compliance for businesses or individuals seeking a new, renewed, or extended state contract valued at more than $250,000. Providers and owner(s) with at least 20 percent interest will need to request tax compliance certificates that state that they are in compliance with tax programs administered by the department. Providers of contracts anticipated to be $250,000 and under are required to attest to their tax compliance but would not need to receive a tax compliance certificate. The department must respond to requests for tax compliance certificates within 14 calendar days. Tax compliance is defined as being current on applicable tax filings and payments or being on an approved payment plan. Tax compliance certificates are valid for six months after issuance.

House Bill 4027– Funding for the Bureau of Labor and Industries – Business Division
OR Laws 2026, Chapter 30
Effective Date: June 5, 2026

House Bill 4027 establishes the Bureau of Labor and Industries (BOLI) Expenses Fund, to be managed by the Department of Consumer and Business Services (DCBS). The fund will be used to support staffing levels at BOLI. A rate increase to the Workers' Benefit Fund (WBF) assessment, paid by employers and employees, is collected by DOR. The tax rate will be established by DCBS and will be transferred from the WBF to the BOLI fund.

House Bill 4052 – Tax credit for Oregon-chartered banks – Business Division
OR Laws 2026, Chapter 36
Effective Date: June 5, 2026

House Bill 4052 creates a corporate income tax credit for Oregon-chartered banks newly established in the state for the first three years they do business in Oregon. The maximum credit is $1 million per year. DCBS will notify DOR about banks that are eligible for the credit.

House Bill 4084 – Requirements for new jobs tax credit and establishes the Joint Permitting Council – Business Division and Personal Tax and Compliance Division
OR Laws 2026, Chapter 50
Effective Date: June 5, 2026

House Bill 4084 establishes the Joint Permitting Council to administer a fast-track permitting program allowing eligible projects to receive expedited approval from specified state agencies. Of interest to DOR are provisions that pair with Senate Bill 1507 and the new job creation tax credit. House Bill 4084 clarifies that the tax credit applies to specified qualified industries and eligible taxpayers are required to receive credit certification from the Oregon Business Development Department (OBDD). The bill also requires OBDD to establish the credit application process.

House Bill 4089 – Interagency Compliance Network evaluation of wage theft – Business Division
OR Laws 2026, Chapter 53
Effective Date: January 1, 2027

House Bill 4089 establishes provisions related to contractors and subcontractors who routinely violate wage laws by using unlicensed construction labor contractors. DOR is a member of the Interagency Compliance Network (ICN) along with Oregon Employment Department, BOLI, DCBS, Oregon Department of Justice (DOJ), Construction Contractors Board, and the State Landscape Contractors Board. The bill requires the ICN to develop methods for gathering and sharing information related to entities and individuals that commit wage theft.

House Bill 4130 – Farmland special assessment for agriculture product processing – Property Tax Division
OR Laws 2026, Chapter 115
Effective Date: January 1, 2027

House Bill 4130 clarifies that land under certain farm crop and product processing facilities that are currently in “farm use" may qualify for farmland special assessment. The bill establishes requirements for owners of exclusive farm use (EFU) or non-EFU land to apply for the assessment demonstrating that it meets the definition of “processing facility." Provisions of the bill may help differentiate whether a farmer is “preparing" farm products for market or “processing" products into value-added goods.

House Bill 4134 – Changes to Transient Lodging Tax for wildlife and natural resources programs – Business Division
OR Laws 2026, Chapter 140
Effective Date: June 5, 2026

Governor Kotek HB 4134 Signing Letter – April 7, 2026

House Bill 4134 increases the statewide transient lodging tax from 1.5 percent to 2.75 percent and deposits the new revenues into the Recovering Oregon's Wildlife Fund. Any collector of the transient lodging tax is required to describe the increase on receipts as a “nature conservation fee." The bill also prescribes distribution of the increased revenue to ten different funds or agencies including the Oregon Department of Fish and Wildlife, the Oregon Department of Agriculture, the Higher Education Coordinating Commission, the Oregon State Police, and DOJ. DOR will partner with agencies to ensure accurate and timely distribution of these funds.

House Bill 4178 – Cash payment rounding policy – Personal Tax and Compliance Division
OR Laws 2026, Chapter 126
Effective Date: April 7, 2026

House Bill 4178 allows public bodies to establish rounding policies related to in-person cash or mixed-tender payments. The policy is in response to the end of the production of pennies. If a public body establishes a cash rounding policy, they must publicize the policy to customers and apply it consistently across cash transactions. DOR only accepts cash payments at the Salem office and has an inventory of pennies to make exact change until a broad public policy is established in the Oregon Accounting Manual.

Senate Bill 5703 – Modifies lottery and revenue allocations to reflect the March 2026 revenue forecast – Business Division

OR Laws 2026, Chapter 138
Effective Date: April 7, 2026

Senate Bill 5703 modifies previously approved revenue allocations to various funds including the Criminal Fine Account, Oregon Marijuana Account, and Fund for Student Success. DOR collects and distributes revenue to these accounts and will allocate according to the revised legislative direction. Reductions to accounts were approved due to declining revenue collections.

House Bill 5204 – Modifies agency budgets to reflect 2026 budget decisions – Business Division, Personal Tax and Compliance Division, and Property Tax Division
OR Laws 2026, Chapter 129
Effective Date: April 7, 2026

House Bill 5204 included budget adjustments for DOR, permanent positions to support the ongoing maintenance and enhancement of the Electronic Valuation Information System (ELVIS), and positions to support implementation of Senate Bill 1507.

Senate Bill 1511 – Estate tax modifications – Business Division

As last discussed, Senate Bill 1511 would have raised the Estate Transfer Tax filing threshold from $1 million to $2.5 million and indexed that threshold to inflation. The bill also proposed a new tax rate table, increased rates, and a phase-in of the tax liability beginning at the threshold.

House Bill 4014 – Task Force on Taxation of International Income – Business Division

As last discussed, House Bill 4014 would have established the 11-member Task Force on Taxation of International Income that would have been staffed by the Legislative Revenue Office. The bill defined the Task Force scope to investigate whether changes to Oregon's tax law could improve or simplify state treatment of international income and other broad statutory changes, and report to the legislature by December 1, 2026.

House Bill 4023 – Restrictions on mass transit district financing – Business Division

As introduced, House Bill 4023 would have prohibited a mass transit district from using certain financing methods without voter approval. At the request of, and in partnership with mass transit districts, DOR administers collection of taxes for these districts.

House Bill 4051 – Program for deferred loans for first-time homebuyers – Personal Tax and Compliance Division

As last discussed, House Bill 4051 would have created a three-year program for first-time homebuyers to defer loans in an amount not greater than the lesser of closing costs or one percent of the purchase price. The loan plus interest would be due when the home is sold, borrower moves out, or the home is mobile and has been moved out of state.

House Bill 4125 – Modification to the methodology for the revenue forecast – Research Section

As last discussed, House Bill 4125 would have modified the method to produce the quarterly economic and revenue forecast by requiring use of estimated that are close to the low end of the range of estimates. The bill would have required the Close-of-Session forecast to incorporate the greatest positive difference between forecast and actual revenues over 10 years. The bill also would have created the One-Time Emergencies and Finance Fund to be used for specific purposes.

House Bill 4136 – Elimination of mortgage interest deduction except for primary residence – Personal Tax and Compliance Division

As last discussed, House Bill 4136 would have eliminated the mortgage interest deduction for personal income tax, on residences other that the taxpayer's principal residence unless certain circumstances were met. The bill would have required DOR to ultimately transfer to the Oregon Homeownership Opportunity Account, an amount equal to estimated increase in revenue attributed to the restriction on mortgage interest deductions. The account would have been used for down payment assistance programs.