[Update 1.7.21] - Key dates and CAT forms from the Oregon Department of Revenue and the Corporate Activity Tax team
Key dates for 2021 include:
CAT forms can be found on the Department of Revenue website forms page by scrolling down to Corporate Activity Tax or entering Corporate Activity Tax in the search block. Important online resources include a worksheet to help with estimating payments, registration and payment training, a list of frequently asked questions, and a series of short subject-specific instructional videos.
Taxpayers with questions about the CAT can email email@example.com or call 503-945-8005.
Relief options available to taxpayers negatively affected by the COVID-19 pandemic can be found on the agency’s tax relief options page. Information about tax relief available for those affected by wildfires is also available on the agency website.
Commercial Activity Tax (CAT)
The new Commercial Activity Tax is imposed only after a taxpayer exceeds $1 million of taxable commercial activity. Once they pass that threshold, the tax is $250 plus 0.57% on gross receipts greater than $1 million after subtractions. Proceeds of the tax are directed by statute to boost funding for public schools. The Department of Revenue's website includes a list of frequently asked questions (FAQs) for tax payers to better understand what the tax is and who is subject to the tax.
Latest Announcements & Updates:
Resources & Webinars to Help You Understand the CAT
The Commercial Activity Tax is complicated and calculating your potential tax can be confusing. Therefore, ORLA has created a CAT calculator example to help our members understand how to calculate the tax. This exercise is only meant to help you project what your tax liability could be; as always, be sure to consult your tax advisors.
ORLA hosted two members-only informational webinars on Nov. 19 and Dec. 3 that explained the new tax, the Department’s implementation plans and what you can expect as a business owner. Tax experts with accounting firm Moss Adams LLP in Portland also provided some best tax practices for the hospitality industry. ORLA members can access the slide deck from the presentation by logging into the Member Portal on ORLA's website and clicking the Resource Library.
FAQ: Can we include the CAT tax on our customers’ bill?
A. The legislation that established the CAT (Oregon Laws 2019, Chapters 122 and 579) does not specifically prohibit a business from passing on additional cost of the tax. If you do choose to add a new line item to the receipt, the line item itself still counts as “commercial activity” when determining your tax liability. Consult with an attorney or financial advisor before making any final decisions.
How the Commercial Activities Tax Came About
This was one of the 2019 Legislative Session bills having the biggest impact on businesses. ORLA was opposed to this bill as it raised taxes on commercial activity for businesses with gross revenues of over one million dollars. ORLA, along with others in the business community, was able to amend the original bill to include a deduction for labor or cost of goods sold. The association will work during the rule making session to ensure hospitality businesses will be able to include the tax increase on receipts so customers can see the impact of the tax.
Additional Information and Timeline for the CAT
DOR Sought Industry Input in CAT Rule Making
The Department of Revenue (DOR) held a series of town hall meetings across the state in September-October to seek input from business taxpayers about the administrative rules for Oregon’s new Commercial Activity Tax (CAT). Nearly 900 business taxpayers and tax professionals took part in these public forums or participated in video conferences and conference calls. More information is now available on the CAT page of DOR website.
If you have any questions, please email Greg Astley, Director of Government Affairs, at Astley@OregonRLA.org.
This is for general informational purposes only. The information is not, and should not be relied upon or regarded as, legal advice. Please consult with your legal advisors.
Why, Where to Begin, and Current Resources
"The really important thing is that we be vulnerable with ourselves and with our teams in asking why Oregon doesn’t look like the rest of the country. We need to understand how we are influenced and make decisions based on biases that we have been conditioned with our entire lives. Recognizing the environment in which we live and operate can at times be a hard pill to swallow. But unless we are willing to challenge our status quo, we will be unable to evolve… and if we aren’t evolving, we are dying off….” Ken Henson, Director of Restaurant Operations, Pelican Brewing Company & Kiwanda
Ken’s comment is so powerful to me. Being vulnerable and realizing that many of us lack the perspective and experience necessary to plan, create, and implement programs that encourage representation and participation of diverse groups in our organizations may feel daunting. And, though many of us have the desire, creating welcoming environments that are inclusive also of all guests’ needs is similarly challenging when we recognize that unconscious bias is a reality.
What resources are available to help understand these challenges? I asked a few industry colleagues, who have been invested in diversity, equity and inclusion (DEI) work for quite some time, for recommendations and I’m including several of their favorites below. I will be posting more soon on the Foundation’s webpages.
ACKNOWLEDGING THE NEED FOR STRATEGIC DIRECTION AND INVESTMENT
Oregon history: why do we find ourselves where we are? Dawnielle Tehama, executive director of the Willamette Valley Visitor’s Association recommends this article to help everyone understand the history behind and the extent of bias which continues to present challenges in our state: https://bit.ly/RHofPDX. “Oregon is often touted as the most liberal State in the union, but the state continues to crawl from its deeply racist history…. In 1844, the provisional government of the territory passed a law banning slavery…. Any black person remaining would be flogged publicly every six months until he left. Five years later, another law was passed that forbade free African Americans from entering into Oregon.” Even as recently as 2016, “Portland is the whitest big city in America, with a population that is 72.2 percent white and only 6.3 percent African American… Because Oregon, and specifically Portland, its biggest city, are not very diverse, many white people may not even begin to think about, let alone understand, the inequalities.”
Understanding unconscious bias – This exercise, a free online tool from Harvard’s Project Implicit®, can help team members understand the term and how, despite best intention, most of us do have unconscious bias which affects the way we perceive, approach, and respond to those who are different than us. The surprising results of these tests often convince participants about their own need for training assistance and may help create buy in: Implicit.harvard.edu/implicit/takeatest.
Company culture first – As the Director of People & Culture for Kimpton’s Portland properties, Alex Thompson is intrigued with successful DEI hiring, mentoring, and company culture models. He notes “While Slack is about as far away from hospitality as you can get and this article is a few years old, the principles are exactly the same. Key points include, ‘…the absence of a single diversity leader seems to signal that diversity and inclusion aren’t standalone missions, to be shunted off to a designated specialist, but are rather intertwined with the company's overall strategy.’” https://bit.ly/TAslackdiversity
Alex says he also appreciates this article, https://wapo.st/3g4nb95, which notes, “DEI-forced training appears to have the opposite of the intended effect, companies need to find more organic ways to communicate values and expectations and influence outcomes.”
Intention and result – Ken Henson shared the following with me, “Doing the right thing and wanting equality and inclusion for all isn’t enough. There are studies, such as this article in the Harvard Business Review (https://hbr.org/2001/04/race-matters), which document how and why even the best-intentioned recruiting policies often fail from lack of insight and proper support.”
The Multicultural Foodservice and Hospitality Alliance (MFHA), whose mission is to “bring the economic benefits of diversity and inclusion to the food and hospitality industry by building bridges and delivering solutions,” offers a myriad of resources. These include free webinars ranging from ‘Moving Beyond Unconscious Bias with Cultural Intelligence’ to ‘Insights for Building Effective Multicultural Teams during COVID-19.’ Find out more including podcasts, Town Hall meetings, and speakers for hire at mfha.net/category/news/webinars.
The American Hotel & Lodging Educational Institute collaborated with MFHA to create a five-part interactive training suite for employees that focuses on unconscious bias with topics that include Understanding Bias, The Impact of Bias at Work, and Dealing with Bias: Ours and Others.’ A Manager’s Training Edition is also available, visit ahlei.org/program/unconscious-bias.
Recommended Reading - On Dawnielle Tehama’s extensive list of recommended reading resources she includes this article https://bit.ly/3qmH9AG, written in 2017 and updated July 2020. Topic groups include Talking About Racism, Anti-Racist Facilitation, and The Role of White People in Anti-Racist Work.
The Oregon Hospitality Foundation is exploring opportunities to collaborate with statewide hospitality partners, as well as our counterparts in other states, with the intent to create an unconscious bias video training toolkit for Oregon’s frontline hospitality service staff. We will provide updates as we make progress with identifying funding for this project.
“Everyone thinks of changing the world, but no one thinks of changing himself.” - Leo Tolstoy
In the meantime, I would love to hear of your own favorite resources on these topics, so please feel free to drop me a line! | Wendy Popkin, Oregon Hospitality Foundation
Wendy Popkin is the Executive Director of the Oregon Hospitality Foundation, a nonprofit 501c3 dedicated to providing educational, training, and philanthropic support to Oregon’s restaurant, lodging, and tourism industry. Wendy is a 35-year career veteran who describes herself as “fanatically enthusiastic about helping others enjoy the same type of fabulous career opportunities I have enjoyed in the hospitality industry.” OregonHospitalityFoundation.org
[January 8, 2021] - Continued Work with the Governor's Office; New PPP Rules
Local Updates: ORLA is communicating daily with the Governor’s Office as the suffering and economic toll continues to push hospitality businesses to the brink. Our latest conversations are revolving around:
Federal Updates: On Wednesday, the Small Business Administration (SBA) released several interim final rules related to the Paycheck Protection Program (PPP) and the second draw of PPP loans as outlined in the recently passed Economic Aid Act. The SBA announced that PPP will re-open the week of January 11 for new borrowers and certain existing PPP borrowers.
The National Restaurant Association has distilled this new PPP information into a seven-page "user manual" that can be accessed online here: PPP 2nd Draw: Helping Restaurants and Small Businesses.
The American Hotel & Lodging Association shared a few details on the eligibility and documentation requirements for new and second draw PPP loans in their latest communication to the industry. Hoteliers considering a second draw of PPP are urged to contact their lenders and begin gathering the data and information necessary to complete the application process as soon as possible.
For more information and updates, visit SBA.gov/PPP and Treasury.gov/CARES.
[January 6, 2021] – Formal Request Submitted by ORLA for a Dedicated State Relief Fund for Hospitality
In Monday's blog post we referenced the importance of additional relief funds to further support Oregon’s struggling hospitality industry. Yesterday we formally submitted our request for a dedicated relief fund on top of funds received by hospitality operators to date managed by counties, Travel Oregon, and Business Oregon. The Oregon Legislative Emergency Board is scheduled to meet January 8 and you can read our formal request through the following link:
[January 4, 2021] – 13 Counties Now Open for Indoor Dining / 23 Counties Still Labeled as ‘Extreme Risk’
This past week, Governor Brown announced the movement of 6 counties in Oregon from ‘Extreme Risk’ to ‘High Risk.’ The move results in the availability of indoor dining in these counties as well as 7 others who had already qualified as ‘Low’ to ‘High Risk’ counties. Indoor dining went back online as of January 1 for Clatsop, Lincoln, Douglas, Coos, Morrow, and Baker counties.
For a review of activity restrictions in each of the 4 risk categories, click the following link:
Regardless of risk category, restaurant and lodging operations across the state remain challenged with ongoing hardship due to health emergency restrictions, consumer demand, or a combination of both. The development this past week confirming the passage of an additional federal aid package in Washington DC was welcome news. Restaurant and hotel operations will be able to secure 3.5 times their monthly payroll costs (Total loan cap of $2 million) in the form of a forgivable loan which will certainly help many operators during the challenging winter months ahead. Additional communication and details will continue to be released by lending institutions who will participate in the next round of Payroll Protection Program loans for small businesses. Make sure to stay in close contact with your CPA, tax advisor, and/or lending institution to take full advantage of the next round of PPP funding.
The Oregon State Legislature has passed legislation creating a new revenue opportunity through the passage of Senate Bill 1801. Restaurant cocktails can now head out the door as a part of food deliveries. In addition, the costs incurred by restaurants who choose to partner with third party delivery companies has been capped at 15 percent statewide.
To review all the details and text of the bill signed into law by Governor Brown on December 23, click the following link:
ORLA continues the important work of preparing for ongoing communication with the Emergency Board of the Oregon Legislature which will meet again in the coming weeks. The joint committee of both state representatives and senators makes important investment decisions with dollars made available through federal aid packages. We will continue to advocate for additional relief funds from the emergency board to further assist hospitality businesses as vaccine supply and access becomes more readily available to Oregonians in the months ahead.
Also, the 2021 session of the Oregon Legislature starts later this month and we must address the inequity in charging Oregon’s restaurant and lodging establishments higher unemployment insurance taxes for Covid related furloughs and layoffs. ORLA will work closely with elected officials in the Oregon House and Senate to address these inequities as employers prepare to pay first quarter taxes for 2021 in the month of April.
And in case you missed it, DOL released a final rule on tip pooling December 22, 2020 which will go into effect across the country on February 20, 2021. The final rule further establishes the legality of overseeing and managing a tip pool that includes staff who do not customarily and regularly receive tips by directly interfacing with a customer. Announcement of this final rule codifies our collective win advocating for the importance of tip pools. Read more here.
[December 21, 2020] - Update from the CEO on federal and state developments
Congress unveiled a $900 billion relief bill to provide short-term economic relief to the country in the face of the coronavirus pandemic. The plan includes several items that will benefit restaurants and lodging establishments, most importantly a second round of access to the Paycheck Protection Program (PPP), with unique provisions aimed to assist the restaurant and lodging industries, which continue to endure unparalleled job and revenue losses.
The federal plan announced today targets restaurant and lodging relief with provisions including:
Other provisions in the bill that will benefit hospitality operations include the deductibility of business expenses paid with PPP loans, enhancement of the Employee Retention Tax Credit (ERTC), extension of the augmented Work Opportunity Tax Credit (WOTC), and increased tax deduction for business meals.
In other news, the Oregon State Legislature is holding a third Special Session of 2020 and is poised to pass To-Go Cocktails legislation as well as statewide caps on third party technology and delivery expenses charged to restaurants. Today’s developments in the Oregon Legislature are expected to assist operators in realizing additional revenue for cocktail programs accompanying food purchases for takeout and delivery while also assisting operators with cost control on expenses.
Our ongoing communication with the media and with our stakeholders throughout the state will continue to acknowledge these tools will help some restaurant and lodging establishments stay in business while not doing much to help others. The depth and severity of the crisis continues to create winners and losers inside of specific industries as well as more broadly. Oregon’s second largest private sector industry needs more help and we will fight for ongoing assistance in our advocacy efforts with both the Oregon Legislative Emergency Board which will meet again in January as well as the longer term 2021 Oregon Legislative Session which starts in January and will most likely end around the beginning of Summer.
Much more needs to be accomplished and we will remain vigilant in pursuing all avenues of relief in our mission to help save as many Oregon restaurant and lodging establishments as possible in our state.
[December 18, 2020] - Here’s the latest from your state association.
Watch for another update next week before Christmas with more developments following Monday's Special Session.
Special Session This Monday - The third special session of 2020 takes place for one day on Monday, Dec. 21. Thank you to ORLA's Director of Government Affairs Greg Astley for providing testimony last night as part of two public hearings scheduled for this Monday special session. The public hearing last night will be followed by a second hearing this Saturday (more info). ORLA is well positioned to provide leadership in getting LC 10 passed and we believe we have favorable chances in getting there.
Federal Elected Leaders Close in on Covid Stimulus Deal - Progress continues on a COVID relief package and a deal could be announced soon. The proposal would include roughly $325 billion in small business relief, including $257 billion for the Paycheck Protection Program that helps employers keep workers who otherwise might go on unemployment. Both the National Restaurant Association and American Hotel & Lodging Association continue pressing to lower the revenue loss for eligibility from 30% to 25%, increase overall size of the loans, and allow deductibility for business expenses paid with PPP loans. ORLA will keep members apprised of the rollout if a PPP deal is reached. It's not too late to share your voice, visit ORLA's website to learn how you can take action.
Status of HB 4204 - We're hearing from lodging operators asking if there's a possibility at getting an extension to HB 4204 which provided flexibility to operators for mortgage obligations with financial institutions with an expiration on that flexibility coming up on December 31. We know the extension will not be a part of the special session on Monday but ORLA is still moving forward in advocating for an extension in the upcoming 2021 session. The initial passage of HB 4204 has proved to be a unique tool available to our industry here in Oregon that many other states do not have. We feel fortunate to have it in the first place and will work hard to get it extended if at all possible.
Give the Gift of Oregon and Get a Lodging Certificate - If you’re looking for last minute gifts for the holidays there are still several lodging gift certificates available which directly support ORLA’s nonprofit, the Oregon Hospitality Foundation. Most of the gift certificates are worth 40-90% more than the minimum donation value and make great gifts. Choose your destination here: oregonrla.org/winter.html.
[December 10, 2020] - ORLA Engages in 3 Frontline Battles to Save Hospitality Businesses
ORLA is anticipating the announcement of a third special session of the Oregon Legislature very soon and the session will most likely take place this coming week before the holidays are upon us. Your state association is keenly aware your ability to stay in business while adhering to business restrictions laid out in the ‘Extreme Risk’ category for applicable counties is near impossible. The ongoing taking of your dining rooms while paying all the bills associated with those dining rooms is anything but sustainable.
ORLA is engaging on 3 frontlines for the foreseeable future with our #1 goal being saving as many restaurant and lodging locations in Oregon as possible. Those 3 frontlines are:
We realize everyone is exhausted from an unbelievable year. But we need you to find that extra gear. Stand up, share your story, and make a difference for yourself, your business, and the Oregonians depending on us who no longer have a job.
[December 7, 2020] - Congress Must Support Restaurants This Year!
Congress needs to hear from restaurants today as they are in session for only a few days more. If they do not get their job done, restaurants will be in the cold until this February at the earliest. Read the National Restaurant Association's letter to Congress sent today along with the results of their latest survey on the economic health of the industry:
Oregon Findings (full survey results):
National Findings (full survey results):
Congress needs to hear from you in these final days of 2020! We're helping the National Restaurant Association put the pressure on Congress to take action for the future of the restaurant industry.
For months, Congress has been trapped in a political tug-of-war while restaurants continue to go dark. A group of moderate Democrats and Republicans last week unveiled a compromise plan that has brought both parties back to the negotiating table. They are calling for a $909 billion relief bill, including a second round of Paycheck Protection Program grants, which with improvements could provide immediate assistance to restaurants.
We need Congress to pass the Blueprint for Restaurant Revival, but we also need to ensure they at least make a “down payment” on a relief plan before leaving town for the year. Our industry simply cannot wait for relief any longer. Efforts in Washington to find the “perfect” solution are laudable, but the lack of progress in the meantime has led too many operators to give up on the government and close down for good.
Thank you for your continued support!
[December 4, 2020] - Updates from Your Association
ORLA is in active discussions with the Oregon Fire Marshall’s Office (OFMO) to ensure our industry has the guidance necessary to provide safe outdoor dining space. As soon as next week the OFMO will have a new “outdoor checklist” that aligns with Oregon Health Authority guidelines, providing operators with a 'one stop shop' resource to know what they can do with dining outdoors and how to get there. We'll keep in contact with Assistant Chief Deputy Chad Hawkins and the Fire Marshall's Office as they finalize this resource so we can get it posted and out to all operators across the state.
[To continue reading previous blog posts from ORLA's CEO, click "Read More" to the right]