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<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">Dear Corporate Activity Stakeholder:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">Drafts of eight administrative rules for Oregon’s new Corporate Activity Tax (CAT) are now available to the public on the CAT page of the Department of Revenue’s website at
<a href="http://www.oregon.gov/dor">www.oregon.gov/dor</a>.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="ms-rteelement-p" style="mso-margin-top-alt:0in;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white">
<span style="font-size:10.5pt;font-family:"Calibri",sans-serif;color:black">The Oregon Legislature created the Corporate Activity Tax in House Bills
<a href="https://olis.leg.state.or.us/liz/2019R1/Measures/Overview/HB3427">3427</a> and
<a href="https://olis.leg.state.or.us/liz/2019R1/Measures/Overview/HB2164">2164</a> during the 2019 session and gave the Department of Revenue the responsibility of writing administrative rules to implement the new law.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">The agency has identified nearly three dozen issues which may need to be addressed with administrative rules. Those issues have been prioritized into three groups.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">The first group of rules — those most business taxpayers and tax preparers have said they need to understand first — will be officially filed with the Secretary of State on Jan. 1, 2020. The other two groups
will follow on Feb.1, 2020 and March 1, 2020.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">The eight drafts posted on the agency’s website this week address:<o:p></o:p></span></p>
<ul style="margin-top:0in" type="disc">
<li class="MsoNormal" style="mso-list:l0 level1 lfo1"><span style="font-size:10.5pt">Estimated payments.<o:p></o:p></span></li><li class="MsoNormal" style="mso-list:l0 level1 lfo1"><span style="font-size:10.5pt">Estimated payments for unitary groups.<o:p></o:p></span></li><li class="MsoNormal" style="mso-list:l0 level1 lfo1"><span style="font-size:10.5pt">Underpayment of or delinquent estimated payments.<o:p></o:p></span></li><li class="MsoNormal" style="mso-list:l0 level1 lfo1"><span style="font-size:10.5pt">What establishes nexus between a business and Oregon.<o:p></o:p></span></li><li class="MsoNormal" style="mso-list:l0 level1 lfo1"><span style="font-size:10.5pt">What constitutes a unitary group for the CAT.<o:p></o:p></span></li><li class="MsoNormal" style="mso-list:l0 level1 lfo1"><span style="font-size:10.5pt">Property brought into Oregon.<o:p></o:p></span></li><li class="MsoNormal" style="mso-list:l0 level1 lfo1"><span style="font-size:10.5pt">The definition of agent.<o:p></o:p></span></li><li class="MsoNormal" style="mso-list:l0 level1 lfo1"><span style="font-size:10.5pt">Filing extensions.<o:p></o:p></span></li></ul>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">Sharing draft rules ahead of officially filing them allows business taxpayers and tax professionals time to review the rules and use them as guidance on how to proceed starting Jan. 1. It also offers them
an additional opportunity to have input into the rules. The agency previously engaged more than 800 stakeholders in the rulemaking process through a series of public meetings, video conferences and conference calls. Department officials said they will welcome
additional feedback on the draft rules. Those with comments can send feedback via email to
<a href="mailto:CatRules.DOR@oregon.gov">CatRules.DOR@oregon.gov</a>. (Please include “comments on draft rules” in the subject line.)
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">When officially filed with the Secretary of State all of the rules for the CAT will initially be adopted as temporary rules. Temporary rules are only good for 180 days. Starting April 1, 2020 the department
will begin the process of adopting permanent rules for the CAT. That process involves public comment, giving stakeholders another chance to provide input to the department.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="ms-rteelement-p" style="mso-margin-top-alt:0in;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white">
<span style="font-size:10.5pt;font-family:"Calibri",sans-serif;color:black">The CAT 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 <strong><span style="font-family:"Calibri",sans-serif;font-weight:normal">commercial activity</span></strong><strong><span style="font-family:"Calibri",sans-serif">
</span></strong>—the total amount a business realizes from commercial activity in Oregon.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">Businesses with taxable commercial activity in excess of $1 million must pay the Corporate Activity Tax.
<span style="color:black">The tax is $250 plus 0.57% of gross receipts greater than $1 million after subtractions.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt;color:black">More information about the Corporate Activity Tax is available on the Department of Revenue’s<span class="apple-converted-space"> </span></span><span style="font-size:10.5pt"><a href="https://www.oregon.gov/DOR/programs/businesses/Pages/corporate-activity-tax.aspx"><span style="color:#954F72">website</span></a><span style="color:black">.
It includes a list of frequently asked questions and a form to sign-up for email updates on the CAT. Stakeholders can direct</span> questions or comments about the CAT via email to
<a href="mailto:cat.help.dor@oregon.gov" title="mailto:cat.help.dor@Oregon.gov"><span style="color:#954F72">cat.help.dor@oregon.gov</span></a> or call 503-945-8005.<span style="color:black"><o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt">Thank you,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:10.5pt;color:#336699">Corporate Activity Tax Policy Team<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:10.5pt">Oregon Department of Revenue<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt;color:black"><a href="mailto:cat.help.dor@Oregon.gov"><span style="color:blue">cat.help.dor@Oregon.gov</span></a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.5pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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