We previously issued a legal update about Oregon's new commercial activity tax (the “CAT”). The Oregon legislature recently passed a bill amending certain provisions of the CAT, which Governor Brown is expected to sign. The CAT is imposed on a business’s Oregon business gross receipts, less a deduction for a percentage of cost inputs or labor costs. Business gross receipts are defined in the statute as a business’s “commercial activity.” The CAT is effective for tax years beginning on or after January 1, 2020.
On July 16, 2019, the backers of a proposed referendum on the CAT announced they were abandoning their efforts to place the tax before the voters. There is therefore unlikely to be a referendum, and the tax is expected to go into effect as scheduled.
The Department of Revenue has formed an internal work group to guide the implementation of the CAT. The group is currently identifying issues on which to provide administrative guidance, Both temporary rules and proposed permanent rules are anticipated.
If you would like to know more about the CAT, how it might affect your business, or options to plan for it, please contact one of our Oregon tax partners: John Gadon (503.778.2130) or Eric Kodesch (503.778.2107).
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