Governor Modifies CAT Tax Estimated Payment Requirements

| April 27, 2020

On March 27, 2020, OAR and nearly fifty other industry groups sent a letter to Governor Brown asking her to suspend Oregon’s new Corporate Activity Tax (CAT) due to the economic fallout of the Coronavirus pandemic.

While Governor Brown has not suspended the tax, according to a letter sent Friday to Oregon Business and Industry she instructed the Department of Revenue to modify its implementation in some significant ways.

First, businesses that will owe under $10,000 in CAT tax in 2020 will not be required to make quarterly estimated payments during 2020 (this threshold previously was $5,000).

Second, businesses that either do not make April quarterly payments or that underestimate their payments will not be assessed penalties if they make a documented good faith effort to comply with the law but are unable to make the payment or to calculate the payment because of COVID-19.

The Governor’s letter states that if a business knows they will owe more than $10,000 in annual CAT tax in 2020, and they have the ability to pay, they should make estimated quarterly payments and comply with the law to the fullest extent possible.  Estimated quarterly payments are due by April 30.

Read the full letter from Governor Brown. The Department of Revenue’s CAT tax website has not yet been updated to reflect the Governor’s guidance.

Parties interested in CAT tax information should sign up for email updates from the Department here. Before taking any action based on the Governor’s letter you should consult with your tax attorney or professional.