Newly Issued Permanent Rules

On July 23, 2020, the Oregon Department of Revenue (“DOR”) issued the second set of permanent rules related to the Oregon Corporative Activity Tax (“CAT”). The DOR issued four permanent rules, all of which it had previously issued in “draft” or “temporary” form.

Below is a list of the newly issued permanent rules. The embedded links below are to our previous discussions of those draft/temporary rules, which are still relevant, as the DOR did not materially change those rules.


Rule Title


Sourcing of Commercial Activity for Financial Institutions in This State


Wholesale Sale of Groceries Exclusion


Farmer’s Sales to Agricultural Cooperatives


Determining Property Resold Out of State and Methods of Determining


Other Tax Updates

Corporate Income Tax

On July 24, 2020, the DOR announced that for purposes of Oregon corporate excise/income tax, “the presence of teleworking employees of the corporation in Oregon between March 8, 2020 and November 1, 2020 won’t be treated by the department as a relevant factor when making a nexus determination if the employee(s) in question are regularly based outside Oregon.”

Legislative Updates

Finally, in our last article, we mentioned the Oregon Legislature (“Legislature”) convened for a special session and was working on passing HB 4202, which would modify administrative provisions of the Oregon CAT, including: 

  • Exempting from taxation certain sales of milk and manufactured dwelling park nonprofit cooperatives;
  • Allowing a unitary group taxpayer to exclude members lacking ties to Oregon;
  • Defining “cost inputs” for a taxpayer engaged in farming operation, for purpose of calculation of subtraction;
  • Establishing methods for a taxpayer engaging in farming operation to demonstrate percentage of goods sold in Oregon compared to outside Oregon for purposes of determining commercial activity;
  • Specifying that a taxpayer is required to register for one time only;
  • Providing that returns and allowances are allowed as offset against commercial activity in year returns or allowances are made;
  • Prescribing methods for apportionment of subtraction;
  • Establishing penalties for failure to file annual return or failure to pay tax by due date of annual return; and
  • Requiring minimum payment per quarter, but barring payment if taxpayer makes payment equal to required installment for corresponding quarter of prior year.

Shortly after we issued that article, the Legislature passed and Governor Kate Brown signed into law HB 4202, effective September 25, 2020. The first special session of 2020 was adjourned on June 26, 2020.

On August 10, 2020, the Legislature convened for the second special session of 2020. The second special session concluded shortly after 11:15 p.m. that day. While the Legislature passed bills to close a billion-dollar budget hole, improve police accountability, and assist Oregonians waiting for unemployment benefits, it did not approve or address any tax bills of note.


We will continue to follow any developments related to the CAT and other tax laws, including any tax bills that may be discussed in potential special sessions and other relevant Oregon tax issues. In the meantime, if you have any questions or comments about the CAT, please do not hesitate to contact Dan Eller or Alee Soleimanpour.

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