The first group of administrative rules governing Oregon’s new Corporate Activity Tax (CAT) have been officially filed with the Secretary of State.
The 12 temporary rules can be found on the Secretary of State’s website. Rules for the CAT can be found by searching current rules for Chapter 150, Division 317.
“The Department of Revenue engaged hundreds of business taxpayers and tax professionals both nationally and statewide to minimize the risk of confusion,” said Nia Ray, director of the Oregon Department of Revenue (DOR). “Our goal is to support taxpayer compliance by providing rules that are easy to understand.”
The rule numbers and the subject matter they address include:
• 150-317-1000 Definition of commercial activity.
• 150-317-1010 Substantial nexus guidelines for the Corporate Activity Tax.
• 150-317-1020 Factors used in determining whether a group of persons are engaged in a unitary group and filing requirements for unitary groups.
• 150-317-1030 Sourcing commercial activity to Oregon from sales of tangible personal property in this state.
• 150-317-1040 Sourcing commercial activity other than sales of tangible personal property in this state.
• 150-317-1100 Agent exclusion.
• 150-317-1130 Property brought into Oregon.
• 150-317-1200 Cost input or labor cost subtraction.
• 150-317-1300 Estimated tax: When estimated payments are required.
• 150-317-1310 Estimated tax payments: Delinquent or underestimated payment or both, constitutes underpayment.
• 150-317-1320 Estimated tax: Unitary groups and apportioned returns.
• 150-317-1330 Extension of time to file.
Two additional sets of temporary rules will be filed in February and March. Temporary rules can only be in effect for 180 days.
DOR officials said they will begin the permanent rulemaking process on April 1. That process includes an official period for public comment and a public hearing, giving business taxpayers and tax professionals another opportunity to provide input into the rules before they become permanent.
The new law requires businesses with Oregon commercial activity in excess of $750,000 to register for the Corporate Activity Tax. Once they reach that threshold businesses must register within 30 days. Some businesses could reach the threshold early in January, while others might not top that mark until much later in the year.
Knowing that many businesses want to register early, DOR opened CAT registration in early December. Registration is through Revenue Online on the agency’s website at www.oregon.gov/DOR.
The 2019 Oregon Legislature created the Corporate Activity Tax in House Bills 3427 and 2164.
The CAT is imposed on businesses for the privilege of doing business in Oregon. It applies to all business entities including those located inside and outside of Oregon. It is measured on a business’s commercial activity — the total amount a business realizes from activity in Oregon.
Businesses with taxable commercial activity in excess of $1 million must pay the Corporate Activity Tax. The tax is $250 plus 0.57% of taxable commercial activity greater than $1 million after subtractions.
Visit www.oregon.gov/dor to get tax forms, check the status of your refund, or make tax payments; call 800-356-4222 toll-free from an Oregon prefix (English or Spanish); 503-378-4988 in Salem and outside Oregon; or email [email protected] For TTY (hearing or speech impaired), call 800-886-7204.