As you know, Oregon has a new Corporate Activities Tax (CAT) that went into effect on 1/1/2020. The first step you need to take regarding the new tax is to register your practice with the state. Oregon rescinded the requirement to register annually, so if you have already registered for the CAT, you will not need to do so again.
If you have reached the threshold of $750,000 in commercial activity in 2020 and have not yet registered, you will need to do so immediately.
If you were not required to register in 2020 but will meet the threshold in 2021 you will need to register within 30 days of reaching the commercial activity threshold of $750,000.
The reason we cannot register the practice for you is the state requires that you open an account with them. What follows are the steps to take to register the practice. Also included is some additional information about the CAT tax.
REGISTRATION
- Visit the registration page at the ODR website.
- Some of the information needed to complete the registration will be as follows:
- Business Name
- Federal Identifying Number
- Oregon Department of Revenue (ODR) Account Login
- All CAT payments will be required to be made electronically.
- If you do not currently have an account, one will need to be set up. This can also be done through the registration link above.
- Information needed to create this account will be:
- Email address
- Federal Employer ID or SSN
- Zip Code
- Oregon Business ID or Account ID
- Verification information either from a recent letter from ODR, recent tax return amounts, or recent payment amounts.
- Business Activity Code
Again, registration is required within 30 days of meeting the $750,000 threshold of commercial activity.
If you need help with any information needed for the registration, please let us know.
ADDITIONAL INFORMATION
In April of 2020 as a response to the COVID-19 pandemic the threshold for payment of estimated taxes as increased to a total liability of $10,000 or more. Due to this threshold increase many businesses chose to forgo paying estimated payments this year. If this was the case the total CAT tax liability for 2020 will be due April 15, 2021.
For 2021 the estimated payment threshold will revert to $5,000 of total liability for the year. If 2021 estimates are required, they are due, April 30, July 31, October 31, and January 31, 2022.
As a reminder, commercial activity is defined as the “total amount realized by a company from the transactions and activity in the regular course of business in Oregon, without deduction for expenses incurred by the business.” The ODR has identified more than 40 items that are excluded from the definition of commercial activity, below are the common exclusions that you may encounter.
- Interest income (unless received from credit sales)
- Dividends received
- Receipts form sale of certain assets
- Loan principal payments received
- Insurance payment policy payments received (unless payments are for loss of revenue)
- Tax refunds
- Income received from a pass-through entity (the CAT is applied at the entity level)
Oregon has clarified that funds received in response to the COVID-19 pandemic, such as a PPP Loan, an EIDL Grant or other SBA debt relief are not considered commercial activity. These amounts received do not need to be considered when calculating your commercial activity.