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Oregon Gross Receipts Tax- Update 8.28.19

Matt Hein

August 28, 2019

Last week, SGA received some clarification regarding the Oregon Commercial Activities Tax (CAT), the recently passed gross receipts tax that we told you about earlier this summer.

Oregon Department of Revenue (ODOR) hosted a two-hour webinar to discuss the tax.  The following information is what we now have available to pass along to you. In review, 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.

At this time, no group has stepped forward to actively challenge the law, so it appears to be here to stay.

REQUIRED REGISTRATION: Required if the business exceeds $750,000 in gross receipts.  At this time annual registration is 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.

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 report the income will be due starting April 15, 2021.

At this time, the Oregon Department of Revenue (ODOR) has not provided any reporting forms, methods or clear instruction for calculations.  We apologize that we cannot provide more information at this time.  Rest assured, we are monitoring the ODOR and will pass along information to you as quickly as possible.   Additionally, SGA will be assessing 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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