News & Publications
Oregon’s Corporate Activity Tax
Did you know that several states have their own taxes unique to them that businesses must file in order to remain compliant? States such as Washington, Delaware, and Oregon have state specific taxes. Oregon’s Corporate Activity Tax (CAT) is a state specific tax that was signed into law in May of 2019 and became applicable to tax years beginning January 1, 2020.
Oregon’s Corporate Activity Tax is a tax for the privilege of doing business in Oregon and is based on commercial activity in Oregon. This tax applies to commercial activity in excess of $1 million for all types of business entities including C and S corporations, sole proprietorships, partnerships, LLCs and other entities. The state defines commercial activity as “the total amount realized by a taxpayer from the transactions and activity in the regular course of their business in Oregon without deduction for expenses incurred by the business.” Businesses with commercial activity of $750,000+ must be registered for the CAT within 30 days of exceeding the threshold, but do not have a payment obligation until the commercial activity is more than $1 million.
The CAT is computed as $250 plus .57% of taxable Oregon commercial activity above $1 million. Only businesses with more than $1 million in the previous calendar year will have a payment obligation.
Items that are excluded from the definition of commercial activity are not subject to the CAT. Several exclusions include:
- Receipts from the sale of motor vehicle fuel
- Certain trades between motor vehicle dealers
- Receipts from the wholesale and retail sales of groceries
- Sales of items or services that are delivered outside of Oregon
- Receipts from a farmer's sales to an agricultural cooperative described in Section 1381 of the Internal Revenue Code
- Receipts from the sale of fluid milk by dairy farmers that are not members of an agricultural cooperative
- Property, money, or other amounts received by an agent on behalf of another in excess of the agent's fee or commission
- Receipts from transactions between members of the same unitary group
- Distributive income received from a pass-through entity
Tips for the Taxpayer
Stay up to date with state, city, and county tax legislation. Researching and sorting through various tax laws can be cumbersome. Utilizing a tax professional will allow you to focus on running your core business.
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Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of Federal, multi-state and local tax compliance and consulting for large US and global corporations. We use that experience to your advantage.
Allyn has significant experience assisting businesses with reviews of their sales and purchases, tax relief applications, nexus, and registrations. As tax laws change, we can use our experience to help your business improve compliance, minimize costs, reduce liabilities, and increase profits.
We can help your business maintain compliance with federal and state tax responsibilities and put procedures in place to ensure future streamlining of processes and increased data accuracy for tax purposes.
Contact us and we can provide a customized cost-effective solution to meet your company’s needs. For further information on Allyn Tax services, please contact: email@example.com.
For More Information
If you are interested in learning more about this topic or other tax topics, please visit our Tax Publications under News & Publications at www.allynintl.com.
Contributor: Courtney Sboro
About Allyn International
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