April 23, 2020

Oregon Corporate Activity Tax: First Payment Due April 30

By John Bonk, National State & Local Tax Leader

Oregon Corporate Activity Tax: First Payment Due April 30 State & Local Tax

A new Corporate Activity Tax (CAT) imposed on all types of business entities in the state of Oregon was signed into law by Governor Kate Brown in 2019. (Revenue from the CAT will be transferred to the Fund for Student Success and will be used for educational spending). The CAT, which took effect January 1, 2020, is in addition to the state’s existing corporate income tax.

The CAT is calculated at a rate of $250 plus 0.57% of the taxpayer’s taxable commercial activity above $1 million, less a subtraction for 35% of the greater of the taxpayer’s cost inputs or labor costs.

A taxpayer expecting $5,000 or more of CAT liability for the calendar year must make estimated payments by April 30, July 31, October 31, and January 31 for the preceding calendar quarter. These due dates have not been extended during the COVID-19 crisis.

The Oregon Department of Revenue has expressed its understanding of potential issues with the first payment due to the pandemic and has expressed that it will be lenient with the application of penalties for miscalculation of estimated payments. However, taxpayers required to make estimated payments are still required to submit by April 30.

For purposes of the CAT, a taxpayer is required to file this Oregon return if the taxpayer:

  1. Owns or uses a part or all of its capital in the state; or
  2. Holds a certificate of existence or authorization issued by the Secretary of State authorizing the entity to do business in the state; or
  3. Has bright-line presence in the state, which is defined as:
    1. Property or payroll in Oregon of at least $50,000; or
    2. Commercial activity of at least $750,000 sourced to Oregon; or
    3. 25% of the taxpayer’s total property, payroll, or commercial activity in Oregon; or
    4. Residency or otherwise domiciled in Oregon.

Payment and registration information can be found at: https://www.oregon.gov/dor/programs/businesses/Pages/corporate-activity-tax.aspx

Additional inquiries can be addressed to: [email protected].

Please contact your Marcum State and Local Tax professional to address any questions regarding this or any other tax matter or contact John Bonk at 954.320.8112 or email John.

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