This quick update is one in a series you can expect to receive regarding Oregon’s Corporate Activity Tax (“CAT”). As you may know, I help lead the Oregon State Bar Taxation Section’s Laws Committee, which is charged with monitoring Oregon tax law developments. From time to time, the Laws Committee meets in Salem with the Department of Revenue (the “DOR”) and representatives from the Oregon Society of Certified Public Accountants. This update concerns matters discussed at today’s liaison meeting.

The DOR recently discussed the eight draft rules released earlier this week. The DOR noted those draft rules are intended to be issued as temporary rules on or about January 1, 2020. In terms of additional rulemaking, the DOR indicated it is planning for its February release to be rules around the wholesaler and reseller definitions and issues.

The DOR has received some feedback regarding the draft agency rule. The DOR may update that draft rule before January, but almost certainly before that rule goes final. The DOR noted that it may modify the temporary rule at any time during the 180 day temporary rule period. So, we may be seeing changes to the temporary rules on a “live” basis. Again, please closely monitor our updates and the DOR’s CAT webpage as we head into 2020.

The DOR also commented on CAT notice letters it sent out in recent weeks. Some taxpayers have expressed concerns regarding whether those notices were meant to be a directive to those taxpayers to register for the CAT. The DOR noted that was not the intent of the notices; rather, the DOR intended the notices as education to taxpayers about the CAT and its registration requirement. Therefore, if you or a client receives a letter that does not necessarily mean you must register for the tax.

Speaking of CAT registration, in addition to other technical fixes, the DOR noted it is working on one for the upcoming Legislative Session to address the CAT’s requirement for annual registration. The DOR expressed a willingness, if not the desire, to remove that annual filing requirement (so long as the taxpayer properly registers in the first instance). 

Finally, the DOR underscored its view that taxpayers may pass the CAT through to its customers. The DOR made it clear that the DOR views any passed-through CAT will itself be subject to the CAT (the so-called “CAT on the CAT”). I have heard a certain amount of confusion on this issue. My view is we should not conflate separately stating the CAT on invoices as a pass-through, with the issue of whether this would lead to the imposition of a CAT on the CAT. As noted, as of today, the view expressed by the DOR is if you separately state the CAT on an invoice, you would then need to subject that separately stated CAT to your own CAT computation. The DOR reiterated it would not be issuing an administrative rule in this area. The DOR also noted it would not be issuing any guidance as to what the outcome might be if a passed-through CAT was estimated higher or lower than the ultimate CAT due by the taxpayer.

If you have any questions about the CAT and these recent developments, please do not hesitate to contact me at or (503) 796-3762.

Sign up

Ideas & Insights