Commercial (Corporate) Activity Tax
[Update 8.14.21] - New Law Allows Fiscal Year Filing for CAT
SB 164 requires a business that files taxes on a fiscal year basis to file an additional short-form in Year One of the Corporate Activity Tax (CAT) to effectively true up their fiscal year tax filing to the calendar year tax filing requirement in CAT. Read more.
[Update 6.14.21] - Key dates and CAT forms from the Oregon Department of Revenue and the Corporate Activity Tax team
Key dates include*:
* The Oregon Legislature is currently considering changes that may impact these dates for some taxpayers. More details will be provided if those become law.”
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.
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