Oregon SB 1510A Extends PTE-E Through 2027

Dear Clients,

Oregon’s 2026 legislative session delivered significant news for pass through business owners. SB 1510A, now passed by both chambers and awaiting the Governor’s signature, includes a highly anticipated provision: the extension of Oregon’s Pass-Through Entity Elective Tax (PTE-E) through the 2027 tax year.

Because many taxpayers rely on the PTE-E to mitigate the federal SALT deduction cap, this extension provides welcome continuity and planning certainty.

Oregon’s PTE-E Extended Through 2027

SB 1510A extends the applicability of Oregon’s PTE-E and its corresponding credit through the 2027 tax year. Without this legislation, the PTE-E would have sunset earlier, creating uncertainty for tax planning and estimated payment strategies.

Why this matters:

• Continued SALT cap relief: The PTE-E remains one of the few tools available to bypass the federal $10,000 SALT deduction limitation for owners of S corporations, partnerships, and LLCs taxed as partnerships.
• Multi-year planning stability: With the extension through 2027, owners can continue to model multi year tax impacts with greater confidence.
• Estimated tax payment flexibility: SB 1510A also allows overpayments to be credited as estimated payments for the next tax year, which may simplify cash flow planning for entities using the PTE-E.

Sections 9–12 of SB 1510A contain the PTE-E provisions.

Additional Tax Provisions in SB 1510A

While the PTE-E extension is the most impactful change for pass through businesses, SB 1510A is an omnibus bill that includes several other updates:

• Updates terminology for certain multinational corporate income to align with federal law.
• Aligns earned income tax credit sunset dates with federal provisions.
• Expands the film production development contribution credit to include commercial production.
• Provides an exception to the annual filing requirement for certain affordable housing related property tax exemptions.
• Extends the property tax exemption for cargo containers.
• Repeals restrictions on certain tribal fuel tax revenues.
• Requires the State Board of Tax Practitioners to register IRS authorized enrolled agents automatically.

The bill will take effect 91 days after the 2026 legislative session adjourns (scheduled for March 8, 2026), once signed by the Governor.

Related Bill: SB 1507 (Reconnect)

SB 1507, also awaiting the Governor’s signature, updates Oregon’s connection to the federal Internal Revenue Code. However, it includes three notable disconnects:

• Qualified Passenger Vehicle Loan
• Qualified Small Business Stock (QSBS) Gain Exclusion
• Bonus Depreciation

Once signed, SB 1507 will take effect 91 days after the 2026 session adjourns.

Recommended Next Steps

Although SB 1510A is not yet effective, the PTE-E extension is now sufficiently certain for planning purposes. We recommend:

• Continuing to model PTE-E elections for 2026 and 2027.
• Reviewing estimated tax strategies in light of the new overpayment-to-estimate provision.
• Coordinating with your tax advisor if your business has international operations or may be affected by the bill’s terminology updates.

We will continue to monitor the bill’s enrollment and signature process and will provide updates as implementation guidance becomes available.

Please reach out to our team with any questions about how these changes may affect your tax planning.