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Oregon Gross Receipts Tax- Update 11/19/19

Mary Kaltenbach

November 19, 2019

In August, we let you know about the new Oregon Corporate Activity Tax (CAT).  We have a few more details to share, and several items that are still “in process” per the Oregon Department of Revenue (ODOR).

As a reminder, the Oregon legislature passed a bill levying a new tax on businesses with gross receipts over $1 million.  In general, the tax is calculated by taking Oregon commercial activity receipts, subtracting either 35% of cost of goods sold or labor costs, and then subtracting the $1 million threshold amount to arrive at a taxable base amount for the CAT.  The tax is then calculated at .57% of the taxable base, plus $250.

REQUIRED REGISTRATION: Required if, and as soon as, the business exceeds $750,000 in gross receipts.  At this time, it appears annual registration will be required.  The penalty for failing to register is $100 per month, up to a maximum of $1,000 per year the business fails to register.  The ODOR has stated that registration should be available starting in January 2020.

GROUPING OF RELATED BUSINESSES:   Related businesses (business with 50% or greater common ownership) are required to combine their gross receipts in order to calculate the filing threshold and taxes due, and file one combined report.

TAX PAYMENTS:  Quarterly estimated tax payments are required beginning on April 30, 2020 for the quarter ending March 31, 2020.  Annual filings to reconcile and report the tax will be due starting April 15, 2021.

FURTHER GUIDANCE:  ODOR will be posting responses to undetermined rules regarding calculations in order of priority. High priority rules will be posted in January, 2020; medium priority rules will be posted in February, 2020; and low priority rules will be posted in March, 2020.

At this time, the Oregon Department of Revenue (ODOR) has not provided registration or reporting forms, methods or clear instruction for calculations.  Rest assured, we are monitoring the ODOR and will pass along information to you as quickly as possible.   Additionally, SGA will assess how we will be able to assist you in estimating your tax due and preparing and filing your quarterly payments and annual filing requirements, if necessary.

If you would like to review the current information available on the ODOR website, please follow the link provided below:

https://www.oregon.gov/DOR/programs/businesses/Pages/corporate-activity-tax.aspx

 

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