Stat. Not exactly chump change! Thus the default, and only, filing method is a world-wide combined return. On May 16, 2019, Oregon Governor Kate Brown (D) signed House Bill 3427 (H.B. There are 43 types of excludible gross receipts under the CAT. The Oregon Department of Revenue announced late Wednesday, March 25, 2020, that the state of Oregon will officially extend the deadline for certain tax payments until July 15, 2020. Each member firm within the Nexia International network is a separate legal entity. License Directory Access information on all known Oregon state licenses. 3427 was signed into law. Starting in 2020, any type of business is subject to a Corporate Activity Tax in relation to commercial activity sourced to Oregon, which are gross receipts arising from applicable goods or services delivered to or used by a purchaser in Oregon. Oregon Corporate Activity Tax (CAT) Update. In May 2019, Oregon imposed a new 0.57% tax on Oregon gross receipts above $1 million that is set to go into effect for 2020. Commercial activity is sourced to Oregon using the rules found in Section 66 of HB 3427. Notable changes for 2020 include: Florida’s corporate income tax rates were set to revert to the 2018 rate of 5.5 percent, but legislation was enacted to extend the 2019 rate of 4.458 percent to 2020 and 2021. The legislation requires substantial nexus with Oregon. Contrary to what the name implies, all business entities, regardless of their business structure, are subject to this new tax. This minimum tax ranges from $150 for sales under $500,000 to … Here’s a partial list: Is there any planning to be done? Oregon’s lack of a state sales tax and relatively well-structured property tax puts the state’s business tax environment in the top 10 in the country. Just what does this mean? As such, a detailed analysis of these exemptions should be made by businesses in all industries. An extension for filing the return is allowed under the statute. While the legislation (House Bills 2164 and 3427) is in place and some aspects of the new tax are clear, many details have been left up to the Oregon Department of Revenue for interpretation through regulations. We have been told regulations will be coming during the first two or … This means that we don't yet have the updated form for the current tax year.Please check this page regularly, as we will post the updated form as soon as it is released by the Oregon Department of Revenue. This discussion explores a few considerations for taxpayers potentially subject to CAT. The new Oregon Corporate Activities Tax becomes effective January 1, 2020. Let’s say you have annual revenues of $250,000 and expenses of $55,000.You want to figure out how much you owe in federal taxes. Oregon’s new corporate activity tax will affect companies with annual in-state revenues exceeding $1 million, and was created to raise $1 billion per year for the state’s schools. CliftonLarsonAllen is a Minnesota LLP, with more than 120 locations across the United States. Example . Kate Brown signed House Bill 3427, which establishes the new Oregon corporate activity tax (CAT). Form OR-20-V, Oregon Corporation Tax Payment Voucher and Instructions: 150-102-172: General: Form: Form OR-24, Oregon Like-Kind Exchanges/Involuntary Conversions: 150-101-734: General: Form : Form OR-24, Oregon Like-Kind Exchanges/Involuntary Conversions Instructions: 150-101-734-1: General: Publication: Form OR-37, Underpayment of Oregon Corporation Estimated Tax: 150-102-037: 2020: … Some concluding thoughts: Low margin business will be disproportionately impacted by the tax. Additionally, the deduction is capped at 95% of the Oregon-sourced commercial activity, resulting in at least 5% of these receipts being subject to tax. Wholesalers do not always know if their customer is going to be an Oregon customer. For tax years beginning on or after January 1, 2020, Multnomah County will: increase the tax rate for the BIT from 1.45% to 2.00%; increase the gross receipts exemption from less than $50,000 to less than $100,000; and increase the maximum owner’s compensation deduction from $108,000 to $127,000. The corporate tax rate applies to your business’s taxable income, which is your revenue minus expenses. Under this “bright line presence” standard, companies have nexus under the CAT if they have at least $50,000 in Oregon payroll or property, $750,000 in Oregon sales, or 25% of their total payroll, property, or sales in the state. Oregon Governor Kate Brown signed HB 4202 into law on June 30, 2020. The legislation directs tax collections to education, but there is no guarantee that current funding for education will not be redirected. Who is right? 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. These rules source real and tangible property to Oregon in a manner similar to general sourcing rules for income tax. — Ninety percent of the tax on your 2020 annualized income. Be sure all allowable costs are reported in the cost of goods sold section of your tax return in order to maximize the 35% subtraction. The new tax will be imposed on sellers, not purchasers. "CliftonLarsonAllen" and "CLA" refer to CliftonLarsonAllen LLP. In May 2019, Gov. First, subtract your expenses from annual revenues: $250,000 – $55,000 = Taxable Income. Like the Federal Income Tax, Oregon's income tax allows couples filing jointly to pay a lower overall rate on their combined income with wider tax brackets for joint filers.. Oregon's maximum marginal income tax rate is the 1st highest in the United States, ranking directly below Oregon's %. The CAT is imposed upon businesses with “substantial nexus” in Oregon, a term that covers both traditional physical presence nexus criteria and a “bright line presence” economic nexus standard. Just what is this new tax? Small Business Ombudsman An independent voice for small business within government. How do they make this calculation? Nexia International Limited does not accept any responsibility for the commission of any act, or omission to act by, or the liabilities of, any of its members. The new tax will be imposed on businesses who have “the privilege of doing business in Oregon” at a rate of 0.57% of receipts less deductions on sales over $1 million. 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