Permanent rules process for 16 temporary CAT rules, 1 new rule underway

Salem, OR—The Oregon Department of Revenue (DOR) has begun the process of converting 16 temporary administrative rules for the Corporate Activity Tax (CAT) into permanent rules and adopting a new permanent rule.

The process began April 1. It will include a public comment period and a hearing on the rules, giving business taxpayers and tax professionals additional opportunities to provide input into the rules before they become permanent.

If social distancing measures to slow the spread of the novel coronavirus, or COVID-19, are still in place, alternatives to an in-person public hearing will be used to accept comment from the public. Information on how to provide feedback will be shared as part of the permanent process. The first permanent rules process will conclude by the end of June. To sign up to receive rulemaking notices from the department go to http://listsmart.osl.state.or.us/mailman/listinfo/…

Those who want to comment now on the temporary rules—which can be found on the administrative rule notices page of the department’s website—can send an email to catrules.dor@oregon.gov.

The temporary rules included in this permanent rules process include:
• 150-317-1000 Definition of commercial activity.
• 150-317-1010 Substantial nexus guidelines for the Corporate Activity Tax.
• 150-317-1020 Factors used in determining whether a group of persons are engaged in a unitary group and filing requirements for unitary groups.
• 150-317-1030 Sourcing commercial activity to Oregon from sales of tangible personal property in this state.
• 150-317-1040 Sourcing commercial activity other than sales of tangible personal property in this state.
• 150-317-1100 Agent exclusion.
• 150-317-1120 Definition of single-family residential construction.
• 150-317-1130 Property brought into Oregon.
• 150-317-1150 Retail grocery sales exclusion
• 150-317-1200 Cost input or labor cost subtraction.
• 150-317-1220 Employee compensation: labor subtraction.
• 150-317-1300 Estimated tax: When estimated payments are required.
• 150-317-1310 Estimated tax payments: Delinquent or underestimated payment or both, constitutes underpayment.
• 150-317-1320 Estimated tax: Unitary groups and apportioned returns.
• 150-317-1330 Extension of time to file.
• 150-317-1410 Motor vehicle resale certification.

The department also plans to adopt a new permanent rule: 150-317-1025 Unitary Group with foreign affiliates and Reporting Requirements.

Other existing temporary rules will be the subject of future permanent rules processes and the CAT policy team continues to work on additional rules to implement the law.

The 2019 Oregon Legislature created the Corporate Activity Tax, making it effective January 1, 2020. It is imposed on businesses for the privilege of doing business in Oregon. It applies to all business entities including those located inside and outside of Oregon. It is measured on a business’s commercial activity—the total amount a business realizes from activity in Oregon.

Businesses with taxable commercial activity in excess of $1 million are required to pay the Corporate Activity Tax. The tax is $250 plus 0.57% of taxable commercial activity greater than $1 million after subtractions.

Taxpayers with general questions about the CAT can email cat.help.dor@oregon.gov or call 503-945-8005.

Visit www.oregon.gov/dor to get tax forms, check the status of your refund, or make tax payments; call 800-356-4222 toll-free from an Oregon prefix (English or Spanish); 503-378-4988 in Salem and outside Oregon; or email questions.dor@oregon.gov. For TTY (hearing or speech impaired), call 800-886-7204.