IRC conformity and OBBBA-related changes
IRC conformity
Signed April 9, 2026, Senate Bill 1507 updates Oregon’s IRC conformity from Dec. 31, 2023, to Dec. 31, 2025. Oregon generally adopts the IRC as of a specific date, or, for provisions related to the definition of taxable income, as applicable to the taxpayer’s tax year.
Decoupling from federal bonus depreciation
The legislation decouples Oregon from federal bonus depreciation under IRC section 168(k). Under the amended law, taxpayers must add back to Oregon taxable income the difference between the allowable federal deduction under section 168(k) and the deduction allowed under section 168(k) as amended and in effect on Dec. 1, 2017 (prior to the enactment of the Tax Cuts and Jobs Act, P.L. 115-97). Taxpayers may subtract from Oregon taxable income the depreciation deduction that would have been allowed under section 168(k) as in effect on Dec. 1, 2017.
The federal bonus decoupling applies to property that is placed in service in tax years beginning on or after Jan. 1, 2026. Notably, while Oregon will decouple from section 168(k), it does not decouple from IRC section 168(n), the OBBBA provision that allows bonus depreciation for certain qualified production property.
NCTI clarification and PTET extension
Signed March 31, 2026, Senate Bill 1510 updates Oregon tax statutes by replacing references to global low-taxed intangible income (GILTI) with NCTI under IRC section 951A. The bill confirms that NCTI will continue to be treated in the same manner as a dividend for purposes of determining Oregon corporate taxable income.
As a result, NCTI remains eligible for Oregon’s dividends received deduction, subject to the taxpayer’s ownership percentage in the controlled foreign corporation generating the income.
In addition, Senate Bill 1510 extends Oregon’s PTET election for two additional years, through tax years beginning before Jan. 1, 2028. The PTET election was previously scheduled to expire at the end of 2025.
