Oregon fully conforms to federal §168(k) for property placed in service on or after January 1, 2011. STR investors take the 100% Year-1 bonus depreciation deduction — restored by the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) for property acquired and placed in service after January 19, 2025 — on both federal and Oregon returns. Because Oregon has one of the highest top marginal rates in the country, the state-side value of §168(k) is unusually large. Cross-reference our all-50-states conformity guide to see how Oregon lines up against every other US jurisdiction.
Modeled on a $150,000 federal §168(k) deduction. Compare in the state conformity tool →
How Oregon Adopts §168(k) — Rolling vs Static Conformity
Oregon's personal income tax base is defined under ORS §316.012, which incorporates the Internal Revenue Code by reference. Aside from a narrow historical window discussed below, Oregon has not enacted a §168(k)-specific carveout — meaning federal amendments to bonus depreciation flow through to the Oregon return.
When Congress restored 100% §168(k) permanently in OBBBA, Oregon adopted that treatment on the same effective date. Static-conformity states (California, Wisconsin, Virginia, Kentucky, and others) required legislation to catch up — and several excluded §168(k) explicitly even after passing conformity updates. Oregon did neither.
For an Oregon STR investor, this means the state depreciation schedule matches the federal schedule for any asset placed in service on or after January 1, 2011.
Worked Example — $150K Federal Deduction + Extra State Savings
Take a $1.1M short-term rental on the Oregon Coast — Cannon Beach, Bandon, or Lincoln City — with a cost segregation analysis identifying $150,000 in 5-year and 15-year property eligible for §168(k):
- Federal Year-1 deduction: $150,000 × 37% marginal bracket = $55,500 federal tax savings.
- Oregon Year-1 deduction: Same $150,000 on the state return. At the 9.9% top marginal rate = $14,850 additional state tax savings.
- Total Year-1 tax benefit: $70,350.
That $14,850 is the largest state-side Year-1 benefit available anywhere in the country from a full-conformer state — a function of Oregon's top marginal rate and clean conformity design. Compared to a California investor at 13.3% who loses $19,950 to add-back, the Oregon investor is ~$34,800 ahead on the state line alone for the same federal deduction.
The Statute Explained
The controlling authority is ORS §316.012, which adopts the Internal Revenue Code by reference for Oregon personal income tax purposes. Because Oregon has not enacted a §168(k)-specific exclusion for post-2010 property, federal bonus depreciation as restored by OBBBA flows through unchanged.
The Oregon Department of Revenue's Publication OR-17 (Individual Income Tax Guide) documents Oregon's depreciation treatment and identifies Schedule OR-DEPR as applicable only to the 2009-2010 non-conformity window. For 2026 STR acquisitions, no Schedule OR-DEPR filing is required.
How Oregon Compares to Decoupled States
Oregon and California share a border and a Pacific coastline, but they sit at opposite ends of the state conformity spectrum:
- California — 100% add-back at 13.3%: ~$19,950 Year-1 miss on a $150K deduction.
- New York — 100% add-back at 10.9%: ~$16,350 Year-1 miss.
- Hawaii — 100% add-back at 11.0%: ~$16,500 Year-1 miss.
The lesson: high state rate + full conformity = maximum §168(k) benefit; high state rate + decoupling = maximum §168(k) drag. Oregon lands in the favorable quadrant.
What This Means for Your STR Purchase Decision
Because Oregon's state layer is unusually generous, §168(k) is a materially larger factor in an Oregon STR pro forma than in most other states. On a $150,000 deduction, the state layer alone puts an extra ~$14,850 in your pocket — enough to cover several months of debt service on a mid-priced coastal cabin.
The deduction size, of course, depends on the property itself: land ratio, age, price-per-square-foot, and amenity signals. To model both federal and Oregon state Year-1 tax math for a specific address, run the address on your property before you make an offer.
Analyze a specific Oregon property
Run any Oregon STR listing through DepreciMax's $99 property report — line-item finish classification with both federal and Oregon state Year-1 tax math.
For a side-by-side view of Oregon against any other state at any federal deduction amount, use the state conformity tool.
Frequently Asked Questions
Does Oregon conform to federal §168(k) bonus depreciation in 2026?
Yes, for property placed in service on or after January 1, 2011. Oregon uses IRC by reference under ORS §316.012 and fully adopts §168(k) as restored by OBBBA (P.L. 119-21) for property acquired and placed in service after January 19, 2025. A narrow historical carveout applied to assets placed in service between 1/1/2009 and 12/31/2010.
How much extra state tax savings does an Oregon STR investor get from bonus depreciation?
On a $150,000 federal §168(k) deduction, an Oregon investor at the 9.9% top marginal rate captures an additional $14,850 in Year-1 state tax savings on top of ~$55,500 in federal savings at the 37% bracket. Total Year-1 tax benefit: about $70,350 — the largest full-conformer state layer in the country.
What is the Oregon statute that governs IRC conformity?
ORS §316.012 adopts the Internal Revenue Code by reference for Oregon personal income tax purposes. Federal IRC amendments including OBBBA's restoration of 100% §168(k) apply for Oregon purposes. Schedule OR-DEPR exists only for legacy 2009-2010 non-conformity period assets.
What about the 2009-2010 Oregon non-conformity window?
For assets placed in service between January 1, 2009 and December 31, 2010, Oregon did not conform to federal §168(k) and required a separate state depreciation schedule on Schedule OR-DEPR. For any asset placed in service on or after January 1, 2011 — including all 2026 STR acquisitions under OBBBA — Oregon fully conforms and no schedule variance applies.
How does Oregon compare to decoupled states like California?
California requires a 100% add-back at 13.3% (~$19,950 miss on a $150K deduction). Oregon full-conforms at 9.9% (+$14,850). That's a ~$34,800 swing in Year-1 cash — one of the largest state-conformity spreads in the country, and it lands entirely on the Pacific West Coast.
Does Oregon's lack of a sales tax affect the depreciation calculation?
No. Sales tax isn't relevant to depreciable basis for real property acquisitions — depreciable basis is the purchase price plus improvements. Oregon's absence of a general sales tax is a separate favorable feature for STR operators (no tax collected on nightly stays under state law), but it doesn't change the §168(k) computation.
- Oregon Department of Revenue — Publication OR-17: Publication OR-17 (2025)
- ORS §316.012 (Personal income tax; IRC by reference)
- IRS §168(k) — Modified Accelerated Cost Recovery System, additional first-year depreciation
- One Big Beautiful Bill Act of 2025 (P.L. 119-21) — restored 100% §168(k) for property acquired and placed in service after January 19, 2025
Every state's §168(k) position, in one place
Interactive map, sortable table, and deep-dive guide for each of the 51 jurisdictions — post-OBBBA verified.
See the 50-state map →