What you need to know about the new Corporate Activity Tax in Oregon

The new corporate activity tax is called CAT for short mmkay.

Also, according to the DOR website it states that this money will establish a “Fund for Student Success” – incase anyone is wondering where this money is intended to go 😊

Who has to deal with this?

If you are doing business in Oregon, whether you live there or not, the CAT applies to you if you meet the sales threshold.

Even though the name has “corporate” in it, don’t be fooled. It actually applies to most forms of businesses and all industries – corporations, LLCs, individuals, partnerships, trusts, etc.

Receipts based tax?

The tax is not based on income AFTER expenses, it’s based on your gross receipts. This is your total sales number.

There are exceptions to these receipts such as interest, dividends, retail of groceries, sale of certain assets, etc. Click here for a full list.

How much $$ do I need to make for this to matter to me?

Less than $750,000          No Filing or Registration

$750,000 and above       Must Register

$1MIL in sales                   Must File

More than $1MIL             Must File and Pay Tax

Do I need to file a separate form?

The CAT tax is separate from your income, excise or minimum tax in Oregon. It will be reported separately and will be another return to file annually.

This form is due on April 15th, and quarterly estimates are required.

How is the tax calculated?

It’s not a simple calculation, but starts with a fee of $250.

There is an allocation, cost subtraction and potential exclusions from gross sales.

Once you get this amount it will be .57% applied to the excess of $1MIL.

For examples click here.

How to deal with this now?

Although you can’t impose this tax onto your customers you can incorporate it into your total sales price to help absorb the blow.

Contact your CPA and get help if you think you’ll exceed 1MIL in Oregon. Get an idea of what tax implications it means for you and then budget/plan/strategize.