Governor Kotek signed SB 1507 today. The bill that disconnects Oregon from several federal tax provisions — including the Qualified Small Business Stock (QSBS) exclusion that I’ve been writing and talking about for the past month. It’s law. And I’m not going to pretend I’m happy about it. But…
Before you close the tab — read the signing letter below. Because the governor said something in it that matters.
But Senate Bill 1507 could affect Oregon’s economic competitiveness, specifically disconnecting from Section 168(k), commonly referred to as M&E bonus depreciation, and disconnecting from the Qualified Small Business Stock (QSBS) exemption. These changes have unique impact on small businesses and start-ups companies. I take these potential effects seriously.
She named it. By name. QSBS. In a signing letter. That doesn’t happen by accident.
And then this:
At this critical time for Oregon’s economic growth trajectory, we need to take steps to ensure we are attracting and keeping business investment in Oregon. To that end, I will work with the members of my Prosperity Council to help to propose legislation for the 2027 session that would address the QSBS exemption issue specifically, as well as any other pathways toward sustained and increased investment in Oregon.
Read that again. The governor is committing — in writing, in a formal signing letter to the Secretary of State — to propose legislation in the 2027 session to address QSBS specifically. Via the Prosperity Council.
That’s not a vague promise. That’s a named mechanism, a named timeline, and a named policy.
A signing letter that names the problem, acknowledges the impact on startups, and commits to a fix? That’s more than I expected.
The rest of the letter frames SB 1507 as a response to Trump’s H.R. 1 — protecting Oregon from “automatically copying every new tax break” in the federal bill, preserving funding for healthcare, K-12, and higher education, and expanding the state Earned Income Tax Credit. That framing is reasonable. Oregon shouldn’t blindly adopt every federal tax change.
But the QSBS exclusion isn’t a Trump tax break. It’s been federal law since 1993. And the governor’s own letter acknowledges that disconnecting from it “could affect Oregon’s economic competitiveness.” So the question was never whether it was a problem. The question was whether anyone was paying attention.
Today’s answer: Yes. We are.
The 2027 session is the next opportunity. The Prosperity Council is the vehicle. And if you’re a founder, an investor, or someone who cares about Oregon’s startup community — now you know what to watch for.
For the complete letter, here’s the PDF of the Governor’s signing letter.
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