Oregon Commercial Activity Tax (CAT) Legislative Revisions

The Oregon Senate recently approved House Bill 4202, which will provide much needed revisions to the original Commercial Activity Tax (CAT) legislation enacted last year. The Bill passed by a 26-1 vote after unanimous approval in the House and is now headed to Governor Brown for signature.

Significant revisions in the bill include:

  • Taxable gross receipts can now be reduced by returns and allowances in arriving at taxable commercial activity. The original law did not provide for this reduction.
  • The legislation provides fiscal year taxpayers the ability to compute their statutory subtraction using their most recent fiscal year-end.
  • For farming operations that do not report cost of goods sold, the taxpayer’s operating expenses, excluding labor costs, can be used to compute the statutory subtraction.
  • Taxpayers will now be required to register only once, instead of annually.
  • Unitary groups can now exclude affiliated foreign entities if they have no Oregon commercial activity.
  • The penalty for underpayment of quarterly estimated tax payments has been reduced to 5%, a safe-harbor was added, and the 80% threshold for estimated quarterly estimated tax payments has been extended through tax year 2021.

Please contact Don Lance or Tiffany Nash with any questions regarding these revisions.