by Shaanth Nanguneri, Oregon Capital Chronicle
June 3, 2026
Oregonians won’t have the chance to vote on whether to replicate federal tax breaks for car loan interest and business assets on their state taxes after a referendum campaign led by conservative anti-tax operatives fizzled out.
Oregon automatically replicates changes to federal tax law, including those included in congressional Republicans’ 2025 tax and spending megalaw. But facing hundreds of millions in lost tax revenue, legislative Democrats voted this spring to separate from parts of the tax code.
In response, Republican Reps. Ed Diehl of Scio and Dwayne Yunker of Grants Pass teamed up with the Oregon Freedom Coalition to collect the nearly 80,000 signatures necessary to refer the measure to the November ballot.
Diehl and the Oregon Freedom Coalition were fresh off another tax referendum victory and optimistic about their chances, but they admitted defeat ahead of Thursday’s deadline to collect signatures to qualify for the November ballot.
Nick Stark, executive director of the Oregon Freedom Coalition, attributed the outcome to volunteers being busier during a primary election and referendum signers confusing the measure with the same initiative as the gas tax referendum.
“I think we view it as something that, off the momentum of last fall, we were able to kind of take some lessons moving forward,” Stark told the Capital Chronicle on Wednesday. “With this, it was ‘OK, we learned a lot more lessons.’”
The Salem Statesman Journal first reported the effort’s failure.
The referendum’s failure staves off what could have been about a $300 million hole in the state’s budget. The ballot referendum’s qualification could have forced Oregon lawmakers to call a special session or find emergency funding measures ahead of the 2027 legislative session.
Oregon Republicans had reason to believe they could pull off such a resource-intensive campaign after they collected more than 250,000 signatures in a similarly short time period last fall to refer to transportation fee increases and a gas tax hike to the ballot. Voters overwhelmingly rejected those fees in last month’s primary election.
But some political experts said the new petition effort was difficult for voters to grasp and inextricably tied to President Donald Trump. Activists and GOP lawmakers hoped to reinstate tax deductions on auto loan interest for brand new American-made cars and another allowing businesses to immediately deduct from their taxes 100% of the cost of “depreciating assets,” such as real estate and equipment.
An April survey from the Democratic-aligned pollster Navigator Research found that 49% of Americans view the GOP’s 2025 tax and spending law unfavorably, in comparison to 36% who view it positively.
While there was no formal organized support for the gas tax ballot measure in May, a coalition of progressive groups had formed in order to oppose the disconnect referendum, backed by a long list of powerful left-leaning unions and lobbying organizations in Salem.
The group on Wednesday said in a statement that Oregon voters have refused to sign a petition “that would have reopened Trump tax loopholes at the expense of schools, healthcare, and public safety.”
“SB 1507 didn’t raise taxes on Oregonians—it held corporations and the wealthy accountable for paying their fair share,” the Fight for Our Future coalition wrote. “Lawmakers were smart to pass it, and the failure of this effort makes clear that Oregonians are looking to them to ensure Oregon’s budget works for the people who live here, not corporations looking for a better deal.”
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