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.

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[Update 6.14.21] - Key dates and CAT forms from the Oregon Department of Revenue and the Corporate Activity Tax team

Key dates include*:

• August 2—Second quarter 2021 CAT estimated payments due.
• October 15—Last day to file 2020 CAT return with an extension.
• November 1—Third quarter 2021 CAT estimated payments due.
• January 31, 2022—Fourth quarter 2021 CAT estimated payments due.
• April 15, 2022—2021 CAT returns due.

* 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 cat.help.dor@oregon.gov 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.

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[Update 12.16.20]

​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:

• Dec. 16, 2020 - Forms for Oregon’s Corporate Activity Tax are now available on the Department of Revenue website. Go to the Revenue forms page and scroll down to Corporate Activity Tax or type “corporate” in the search box. 
• ​Nov. 10, 2020 - Department of Revenue (DOR) will host a public hearing on proposed administrative rules via video call from 9-11 a.m. November 24. Testimony will be heard on more than two dozen administrative rules including two permanent administrative rules for the Corporate Activity Tax (CAT). For more information, visit DOR's website. CAT rules that will be part of the hearing are: 150-317-1310 - Estimated Tax Payments: Delinquent or Underestimated Payment or Both, Constitutes Underpayment and 150-317-1420 - Damages Received as a Result of Litigation.
• Oct. 22, 2020 - Two new draft rules have been posted on the Corporate Activity Tax page of the Department of Revenue website; Estimated tax payments for delinquent or underestimated payment, and Damages received as result of litigation. The CAT policy team welcomes feedback on the draft rules. Those with comments can send feedback via email to catrules.dor@oregon.gov.
• Summer 2020 - ORLA: The Department of Revenue has raised the threshold for making estimated tax payments from $5,000 of annual tax liability to $10,000 of annual tax liability for the first year of the tax; businesses in this situation that have not yet made their first quarter payment will not have to do so. No penalties will be assessed for underestimated payments or for not making a quarterly payment for the Corporate Activities Tax if businesses don’t have the financial ability to make the estimated payment; businesses must document their efforts to comply, including how COVID-19 has impacted their business. DOR is providing updates on their website.
• Apr. 22, 2020 - ORLA:  In a brief statement yesterday, the Governor announced she does not support delaying the CAT, despite having heard from several small- and medium-sized businesses that they face severe cash-flow and liquidity issues. However, she said the state will waive all penalties related to first quarter CAT payments.
• Mar. 26, 2020 - ORLA: Oregon Restaurant & Lodging Association joined 48 other Oregon businesses and organizations in signing a letter to legislators urging temporary relief from the Commercial (Corporate) Activity Tax. Oregon’s hospitality businesses are critically challenged with this crisis and a new tax could hurt their ability to pay employees, potentially leading to more layoffs.​ Read the letter.

Click image to download CAT calculator example.

​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

• The tax begins on January 1, 2020. It includes all business entity types, including C and S corporations, partnerships, sole proprietorships, etc.
• CAT returns will be due each year on April 15. Estimated payments for the CAT will be due quarterly.
• You must register within 30 days of when you are aware you will hit the $750,000 registration requirement. If you do not register, there may be a penalty of $100 per month up to $1,000 per year. Online registration will open through Revenue in December.
• According to the Department of Revenue, temporary rules will be published January – March 2020, with permanent rules being established April – June of 2020. Items identified as “critical” by the Department of Revenue will be posted first in January, including instructions for estimated payments, calculations, and registration.
• More information on Oregon.gov/DOR. You can provide input any time by emailing DOR at cat.help.dor@oregon.gov​

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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.

• Summary of conversations during meetings
• DOR's CAT Town Hall Schedule

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.