The first payment of Oregon’s new Corporate Activity Tax (“CAT”) is due April 30, 2020. Although the first annual CAT return isn’t due until April 15, 2021, the first estimated payment for taxpayers who expect to owe at least $5,000 is due April 30, 2020. Estimated payments are due April 30, July 31, October 31, and January 31 for the preceding quarter.
Don’t be fooled by the name; this tax applies to virtually all types of business entities, as well as individuals, whose business activities exceed the state’s nexus threshold.
The CAT is an annual calendar-year tax on gross receipts derived from Oregon sources. It is not charged to customers like a sales tax, but instead is imposed directly on the seller. Some limited exemptions apply to certain taxpayers. A few deductions also are available, including 35 percent of either “Cost Inputs” or “Labor Costs.”
Oregon applies an economic nexus sales threshold (similar to states’ Wayfair thresholds) of $750,000. This threshold applies to any business or “unitary group” of businesses. Businesses with Oregon sales of $750,000 – $1,000,000 have a filing responsibility but no tax liability. Businesses with sales over $1,000,000 are taxed at the rate of 0.57 percent, plus a flat tax of $250 on the first $1 million of taxable commercial activity.
