Calculating the Corporate Activity Tax (CAT)
The Corporate 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 next year based on your sales in 2018. As always, please be sure to consult your tax advisors.
Corporate Activities Tax Passed in the Legislature
The Corporate Activity Tax 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 corporate 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.
According to Oregon's Department of Revenue, the Corporate 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. Some key points to know:
DOR Requests 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 Corporate Activity Tax (CAT). Hospitality industry members were encouraged to join ORLA at one of these meetings and share their concerns about the tax and ask questions.
If you have any questions, please email Greg Astley, Director of Government Affairs, at Astley@OregonRLA.org.