“Corporate Activity Tax” update

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By Greg Henderson

The Oregon Department of Revenue (DOR) is seeking input about the administrative rules for the state’s new “Corporate Activity Tax” from business taxpayers and tax preparers.

Traveling across Oregon, rule writers are sitting down to hear the concerns, questions and suggestions of those affected by the rules.

“We’re touring the state to allow more of the business community to provide valuable input as we move through the rule-making process,” said Nia Ray, director of the Oregon Department of Revenue. “We are excited to have business taxpayers and tax preparers in the southern Willamette Valley join this important conversation.”

The $1 billion per year tax over the next biennium is designated for education needs. The Oregon Department of Education website includes an explanation of how the money will be used. See the information on the website at, https://www.oregon.gov/ode/StudentSuccess/Pages/default.aspx

The rule writers have the unenviable task of interpreting the new law and creating a system to enact the intent of the law in a way that businesses can understand. An estimated additional staff of administrators and programmers will need to be hired to implement the law.

A three-step process, or “Tracks” is being created to come up with Temporary Rules of implementation. The tracks are scheduled for completion on 1/1/20, 2/1/20, and 3/1/20. The Permanent Rules are to be completed April 1, 2020.

There is no shortage of questions coming from the business owners and employees affected by the new law. Understanding exemptions, definitions of “unitary business”, “Common ownership”, “Nexus rules”, and “permanent establishment” are but a few of the areas needing clarification. Business owners will need to implement many processes in order to comply before the rules writers will be finished with their work.

The Southern Oregon Business Journal will continue to provide as much information as possible as it becomes available. 

Those who were unable to attend but want to provide input may email questions or comments to cat.help.dor@oregon.gov

Greg Henderson, Southern Oregon Business Journal

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