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Oregon CAT: Recent Updates to the Oregon CAT in Light of COVID-19

March 17, 2020

Overview

On March 13, 2020, the Oregon Department of Revenue (“DOR”) added an FAQ and made two announcements regarding the Oregon corporate activity tax (“Oregon CAT”).

First, the DOR’s website added a question to its FAQ section regarding labor cost subtraction. That FAQ summarized Temporary OAR 150-317-1120, which we looked at in our March 9, 2020 update.

Second, the DOR reiterated that initial quarterly payments for the Oregon CAT are due April 30, 2020. It stated, however, that it will not assess underpayment penalties to taxpayers making a good faith effort to estimate their first quarter payments, as they understand COVID-19 may impact taxpayers’ commercial activity.

Finally, the Oregon CAT education tour has been suspended due to concerns about the spread of COVID-19. The DOR will announce alternative strategies for providing Oregon CAT update information to business taxpayers and tax professionals in the coming days. If the DOR offers an online version of the education tour, Dan plans to attend online.

On a different note, in our March 9, 2020 update, we mentioned the Oregon Legislature (“Legislature”) ended early on March 5, 2020, as the Legislature was unable to resolve an impasse between the Democratic majority and Republican minority regarding a climate change bill. At the time, we noted that two bills relating Oregon CAT did not become law, and were presumed dead absent a special session. Well, on March 16, 2020, Governor Brown hinted that she may call a special legislative session “sometime in the next few weeks” in response to the COVID-19 pandemic. Although Governor Brown did not specify what would be covered in such a session, it is certainly possible that a few Oregon CAT bills may be considered.

We will continue to follow Oregon CAT bills and other tax bills that may be discussed in the upcoming special session. Please be on the lookout for additional updates in the event of a special session, as well as an update discussing the DOR’s alternative strategies for providing Oregon CAT update information to business taxpayers and professionals.

In the meantime, if you have any questions or comments about the Oregon CAT, please do not hesitate to contact Dan Eller or Alee Soleimanpour.

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