CORPORATE ACTIVITIES TAXCAT forms can be found on the Department of Revenue website forms page. 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 protected] or call 503-945-8005.
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FAQ: CAN I PASS THE CAT ON TO MY CUSTOMERS?
Answer: The laws establishing the CAT do not prohibit any business from recovering a business expense when setting the total price for the sale, lease, or license of an item or the sale of a service (ORS 317A). The CAT is imposed on the entity doing business in Oregon and is considered part of the business's expenses. A business may include the CAT with other business expenses when setting the total price charged to customers. However, the total price charged (including any amount estimated to be attributable to the CAT) is included in the business's commercial activity. While the Oregon Department of Labor has no plan to adopt rules prohibiting taxpayers from passing the cost of the new tax on to their customers, there have been some disagreements between franchisees and franchisors on whether franchisees can pass along the CAT to their guests as a separate line item on receipts/invoices. ORLA developed a Legal Memo that addresses this issue. Members can Log In to access this and other resources in the Resource Library. |
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MORE INFORMATION ON COMMERCIAL (CORPORATE) ACTIVITY TAX
The 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.
Law change affects CAT filing in 2022
With the passage of Senate Bill 164 in the 2021 session, the Oregon Legislature removed the requirement for calendar year filing of returns for the Corporate Activity Tax. For 2021 and forward, returns for taxpayers that use a federal tax year other than a calendar year are due on or before the 15th day of the fourth month following the end of the tax year. A series of frequently asked questions and answers about the CAT, including changes made in Senate Bill 164, is also available on the CAT page of the Department of Revenue website.
Resources and 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.
FAQ: Can we include the CAT tax on our customers’ bill? – 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
If you have any questions, please email Greg Astley, Director of Government Affairs, at [email protected].
The 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.
Law change affects CAT filing in 2022
With the passage of Senate Bill 164 in the 2021 session, the Oregon Legislature removed the requirement for calendar year filing of returns for the Corporate Activity Tax. For 2021 and forward, returns for taxpayers that use a federal tax year other than a calendar year are due on or before the 15th day of the fourth month following the end of the tax year. A series of frequently asked questions and answers about the CAT, including changes made in Senate Bill 164, is also available on the CAT page of the Department of Revenue website.
Resources and 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.
FAQ: Can we include the CAT tax on our customers’ bill? – 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
- The tax began 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 [email protected]
If you have any questions, please email Greg Astley, Director of Government Affairs, at [email protected].
The information on this page 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.
