oregon corporate activity tax

The Corporate Activity Tax (CAT) is imposed on businesses for the privilege of doing business in this state. 3. and will apply . Stat. The Oregon Corporate Activity Tax is a new additional tax reporting obligation that is separate from the Oregon Corporate Excise Tax. Estimated CAT payments for the previous calendar quarter will be due on or before the last day of January, April, July, and October of each year and must be made by electronic funds transfer (EFT). Such services are provided solely by member firms in their respective geographic areas. The improvements will be funded via a gross receipts tax, entitled the Corporate Activity Tax, levied on businesses with commercial activity over $1 million. In May 2019, Gov. “Commercial activity” means the total amount realized by a person, arising from transactions and activity in the regular course of the person’s trade or business, without deduction for expenses incurred by the trade or business. The CAT is applicable to tax … If you would like to sign up for additional information as it becomes available, please Please note that your account has not been verified - unverified account will be deleted 48 hours after initial registration. Signed by Oregon’s governor on May 16, H.B. An Overview of Oregon’s Corporate Activity Tax. Businesses must register when they meet the economic nexus threshold of “commercial activity” sourced to Oregon in excess of $750,000. Accordingly, each person or unitary group with commercial activity in excess of $750,000 must register with the Department of Revenue, or be subject to penalties. Interest, except for interest on credit sales and interest income (including service charges) received by a financial institution, is excluded from commercial activity, as are dividends received. Once the amount of “commercial activity” sourced to Oregon is determined, the CAT imposed is equal to $250 plus the product of the taxpayer’s taxable commercial activity for the calendar year in excess of $1 million multiplied by 0.57%. Please take a moment to review these changes. The CAT is applied to taxable Oregon commercial activity in excess of $1 million. Taxpayers with general questions about the CAT can email cat.help.dor@oregon.gov or call 503-945-8005. You may be required to make quarterly estimated payments as well. It’s now expected to be signed into law by Governor Kate Brown. One of the temporary rules recently sent to the Oregon Secretary of State provides guidance on determining whether a group of “persons” is engaged in a unitary business and clarifies that traditional tests and criteria, such as centralization of management, economies of scale and functional integration, will be applied for CAT regime purposes. The law includes several amendments to Oregon’s Corporate Activity Tax (CAT) statute and is effective retroactively as of January 1, 2020, the original CAT effective date. Intended to raise approximately $1 billion in new annual revenue , 2. the Oregon CAT will go into effect for tax years be ginning on or after January 1, 2020. Included in the bill is a reduction in Oregon’s individual income tax rates for those making less than $125,000 by 0.25 percentage points for each tax … The Oregon CAT regime is viewed as something of a hybrid between the Ohio commercial activity tax and the Texas franchise (margin) tax. 3427 imposes a corporate activity tax (CAT) applicable to tax years beginning on or after January 1, 2020. The February 1st deadline to make the 4th quarter payment for the Oregon Corporate Activity Tax (CAT) is coming up on us quickly. For example, receipts from sales of tangible personal property will be sourced to Oregon if the tangible personal property is delivered in the state. Although there is a temporary rule addressing property brought into Oregon, it does not provide meaningful guidance on how a taxpayer can establish that CAT avoidance was not intended. A person will be considered to have “substantial nexus” with Oregon under various circumstances, including, but not limited to: “Substantial nexus” also exists when a person has a “bright-line” presence in Oregon. The PowerPoint presentation used in the October live Zoom training sessions, along with the questions emailed by participants during the live training sessions and answers from the CAT policy staff. The first payments are due in April next year. The new charge, which is expected to raise $2 billion for education spending, comes into effect on Jan. 1, 2020. The Department of Revenue in recent weeks has been actively soliciting input from CAT stakeholders; issued a list of CAT-related FAQs, and sent to the Oregon temporary CAT rules. Our privacy policy has been updated since the last time you logged in. Because of the reference to “persons,” the CAT unitary group includes all types of business entities—not just corporate entities. We want to ensure that you are kept up to date with any changes and as such would ask that you take a moment to review the changes. sections 314.605 to 314.675,” which are the statutory provisions governing the allocation and apportionment of income for the corporate income tax. “Good cause” does not include relying on a tax professional or an employee to prepare the return on time. 21. “Unitary group” means a group of “persons” with more than 50% common ownership, either direct or indirect, that is engaged in business activities that constitute a unitary business. to Oregon’s existing taxes. A bright-line presence also exists when the person, during the calendar year, has at least 25% of its total, property, payroll, or commercial activity in Oregon. All rights reserved. Get the latest KPMG thought leadership directly to your individual personalized dashboard. We want to make sure you're kept up to date. Oregon Corporate Activity Tax. Adopts a new Corporate Activity Tax (CAT) imposed on all types of business entities. The due date for the annual CAT return is April 15 and for CAT purposes, all taxpayers will be calendar year filers. The latest addition are 12 short subject-specific training videos to help taxpayers better understand key elements of the CAT. On May 16, 2019, Oregon Governor Kate Brown signed into law House Bill 3427, which established an annual Corporate Activity Tax (CAT) based on commercial activity conducted by businesses, effective for tax years beginning on or after Jan. 1, 2020. Basic information on the Corporate Activity Tax​​, High-level summaries of the rules and topics to help with taxpayer compliance​​​​. For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance. Despite its name, the CAT is not restricted to corporations. With the new levy set to take effect on January 1, 2020, it is important to understand applicable filing and registration thresholds. Quarterly estimated tax payments will be required beginning in April 2020. Brown signed into law the new Oregon Corporate Activity Tax. Persons that have “substantial nexus” with Oregon must register with the Department of Revenue for CAT purposes. Profits-based taxes, such as Oregon’s corporate income tax, tend to be volatile, quickly drying up during recessions. Establishes a "Fund for Student Success" that is separate and distinct from the state's general fund. The definition of a taxpayer specifically excludes “excluded persons” defined as including but not limited to, various IRC section 501 entities, certain hospitals, governmental entities, and any persons with commercial activity that does not exceed $750,000 for the calendar year, other than a person that is part of a unitary group with commercial activity in excess of $750,000 dollars. Original parameters of CAT Enacted by H.B. Property brought into Oregon within one year after it is received outside Oregon by a person or unitary group may not be included as taxable commercial activity if the Department of Revenue ascertains that the property’s receipt outside this state by the person or unitary group followed by its transfer into Oregon within one year was not intended in whole or in part to avoid in whole or in part to avoid the CAT.

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