With the passage of House Bill 3427 on May 16, 2019, Oregon is expected to implement a corporate gross receipts tax — or commercial activity tax (CAT) — that will apply to all individuals doing business in Oregon. Set up to fund education, the program will not affect exempt entities, such as 501(c) and government organizations. Below is brief summary of items to consider.
CAT will impact individuals and entities with over $1 million in gross receipts sourced to the state of Oregon, including:
It’s important to note that 43 types of income are excluded from the CAT, including:
Exemptions are available for:
The new tax will go into effect for tax years beginning on or after January 1, 2020, with more about the law expected to be released this summer and fall.
The tax will impose a $250 minimum fee plus a 0.57% tax on Oregon-sourced receipts over $1 million less a 35% reduction for:
The new CAT is expected to go into effect in January 2020. However, it’s not a done deal as of yet. It is very possible voters will get to decide on the tax in a special vote, which is exactly what happened a few years ago when the business community fought a similarly proposed tax and won.
Please contact a member of your service team, or Hannah Prengler at email@example.com for further discussion.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.
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