2022, Form OR-CAT Instructions, Oregon Corporate Activity Tax, 150-106-003-1

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Table of contents

What’s new .................................................................................2

Important reminders ................................................................2

Filing information ..................................................................... 2

Who must register? ................................................................... 2

Who must file? ...........................................................................2

What form do I use? ..................................................................2

Filing requirements ..................................................................2

Unitary groups ..........................................................................2

E-file ............................................................................................3

Federal or other state audit changes .......................................3

Amended returns ......................................................................3

Protective claims .......................................................................3

Additional information on certain exclusions ......................3

Agents. ........................................................................................3

Auto dealers ...............................................................................3

Wholesale or retail sale of groceries.......................................3

Filing checklist and reminders ...............................................4

Estimated tax payments ...........................................................5

Return instructions ...................................................................6

Schedule OR-AF-CAT instructions ...................................... 10

Schedule OR-EXC-CAT instructions .................................... 10

Form OR-QUP-CAT instructions .......................................... 10

Do you have questions or need help? ................................... 11

Appendix A, 2022 Schedule OR-EXC-CAT code list .......... 12

Appendix B, Sample certificates ........................................... 14

Appendix C, Alternative apportionment ............................19

Appendix D, Instructions for estimated payments

if using the annualized method ...........................................20

Oregon Corporate Activity Tax

Form OR-CAT Instructions

2022

Information contained herein is a guide. For complete details of law, refer to Oregon Revised Statutes (ORS) and Oregon

Administrative Rules (OAR).

Go electronic

Fast • Accurate • Secure

File your Corporate Activity Tax return through the electronic filing program. With approved third-party software, you can

e-file your return with all schedules. You can also conveniently include an electronic payment with your e-filed original

return. See “E-file.”

Page 2 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

What’s new

Senate Bill 1524

The Oregon Legislature made a change to the CAT in the

2022 session. Senate Bill 1524 adds that amounts received

by an eligible pharmacy for the sale of prescription drugs

are excluded from the definition of commercial activity and

are exempt from the tax imposed under ORS 317A.116. The

exclusion applies to tax years beginning on or after January

1, 2022 and ends on December 31, 2025. “Eligible pharmacy”

means a pharmacy that has nine or fewer locations under

common ownership in this state. “Eligible pharmacy” does

not include a pharmacy that caters primarily to veterinary

customers. “Pharmacy” has the meaning given that term in

ORS 689.005.

Important reminders

Revenue Online. Revenue Online provides convenient,

secure access to tools for managing your Oregon tax account.

With Revenue Online, you may:

• Register for CAT.

• View your tax account.

• Make and review payments.

• View correspondence we sent you.

• Check the status of your refund.

• File appeals.

• Submit an extension.

• Add an authorized representative/POA.

• Submit documents.

For more information and instructions on setting up your

Revenue Online account, visit www.oregon.gov/dor. As

updates or changes are made to these instructions, they will

also be posted to our website.

Note: The CAT return may not be filed through Revenue

Online.

Filing information

Who must register?

Persons or unitary groups with Oregon commercial activity

exceeding $750,000 must register for the CAT. Commercial

activity is the total amount realized by a business from the

transactions and activity in the regular course of their busi-

ness in Oregon, without deduction for expenses incurred

by the business. Commercial activity is realized according

to the method of accounting used for federal income tax

purposes.

Registration is due within 30 days of meeting the $750,000

registration threshold. You don’t need to register again if you

registered in a prior year. A penalty of $100 per month may

be assessed for failing to register, up to $1,000 in a tax year.

You can register through Revenue Online.

Who must file?

Persons or unitary groups with Oregon commercial activity

of $1 million or more are required to file a CAT return.

What form do I use?

The Oregon CAT program only has one tax return. Taxpay-

ers will file tax returns on the Form OR-CAT, Oregon Cor-

porate Activity Tax Return. Other CAT forms and schedules

include:

• Form OR-CAT-V, Oregon Corporate Activity Tax Payment

Voucher.

• Schedule OR-EXC-CAT, Exclusions From Commercial

Activity.

• Schedule OR-AF-CAT, Schedule of Affiliates for Form

OR- CAT.

• Form OR-QUP-CAT, Underpayment of Oregon Corporate

Activity Estimated Tax.

• Form OR-CAT-EXT, Application for Extension of Time to File

an Oregon Corporate Activity Tax Return.

Filing requirements

Unitary groups

1. A group of entities that is united by more than 50 per-

cent common ownership; and

2. A group of entities that has, directly or indirectly

between members or parts of the enterprise, either a

sharing or an exchange of value shown by:

• Centralized management or a common executive

force;

• Centralized administrative services or functions

resulting in economies of scale; or

• Flow of goods, capital resources, or services showing

functional integration.

A unitary group shall register, file and pay taxes as a single

taxpayer and may exclude receipts from transactions among

its members under the CAT.

Unitary business with non-U.S. members. Unitary groups

may make an election to exclude non-U.S. members from the

return if the non-U.S. member has no Oregon commercial

activity or exclusions from commercial activity that would

otherwise be sourced to Oregon (including, but not limited

to, receipts from transactions between members of the uni-

tary group). Refer to OAR 150-317-1025 for further details.

Designated CAT entity

Any business, or unitary group of businesses, doing busi-

ness in Oregon may have responsibilities under the CAT.

This includes all business entity types, such as C and S

corporations, partnerships, sole proprietorships, and other

entities. Unitary groups must designate a single member

of the unitary group with substantial nexus in this state

to register, file and pay the tax on behalf of the group. For

more information on designated reporting entities, refer to

OAR 150-317-1023.

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

E-file

We accept calendar year, fiscal year, short year, and amended

electronic CAT returns utilizing the IRS Modernized e-file

platform (MeF). Your tax return software may also allow you to

make electronic payments when e-filing your original return.

For a list of software vendors or for more information, search

“e-filing” at www.oregon.gov/dor.

Federal or other state audit changes

If the IRS or other taxing authority changes or corrects

your federal or other state return for any tax year, you

must notify us. File an amended CAT return if the federal

or other state audit report results in a change to taxable

Oregon commercial activity and include a copy of the fed-

eral or other state audit report. Mail this separately from

your current year’s return. If you don’t amend or send a

copy of the federal or other state report, we have two years

from the date we’re notified of the change to issue a defi-

ciency notice. To receive a refund you must file a claim for

refund of tax within two years of the date of the federal or

other state report.

Amended returns

Use the form for the tax year you’re amending and check

the amended box. Always use your current address. If the

address for the year you’re amending has changed, don’t

use the old address.

Fill in all amounts on your amended return, even if they’re

the same as originally filed. If you’re amending to change

exclusions or commercial activity, include detail of all items

and amounts.

If you change taxable income by filing an original or

amended federal or other state return, you must file an

amended CAT return within 90 days of when the original or

amended federal or other state return is filed if the change

results in a change to commercial activity. Include a copy of

your original or amended federal or other state return with

your amended CAT return and attach a letter of explanation

to your amended return that explains what was amended

and why.

You may make payments online for your amended returns

at www.oregon.gov/dor. Don’t make payments for amended

returns with Electronic Funds Transfer (EFT). This also

applies to e-filed amended returns. For paper returns, you

may pay online or include a check or money order with your

return. For e-filed returns, you may pay online or send a

check or money order separately. If you mail your payment

separate from your return, write “Amended” on the payment

and include a completed Form OR-CAT-V with the amended

box checked.

Protective claims

Don’t file an amended return as a protective claim. Use

Oregon Form OR-PCR, Protective Claim for Refund, 150-101-184,

when your claim to a refund is contingent on a pending court

decision or legislative action. Notify us within 90 days of the

final determination by filing an amended return. Don’t file an

amended return before the pending action is final.

Additional information on certain

exclusions

ORS 317A.100(1)(b)

Agents. An agent may exclude property, money and other

amounts received or acquired by an agent on behalf of

another in excess of the agent’s commission, fee or other

remuneration. For the agent exclusion to exist, a person (the

agent) must be acting on behalf of and under the direction

and control of another person (the principal), and all the facts

and circumstances must be considered.

Auto dealers. A vehicle dealer may exclude receipts realized

from vehicle dealer trades (the sale or transfer of a motor

vehicle from one vehicle dealer to another), provided that

the trade is of a new vehicle(s) between franchised dealer-

ships, or the trade is made for the purpose of resale and

based on the need to meet a specific customer’s preference.

Vehicle dealers claiming this exclusion for vehicles traded

to meet a specific customer preference are required to retain

documentation that shows the transaction meets the require-

ments necessary to claim the exclusion. The documentation

needs to include the following:

1. Name, address, and federal ID for both dealers involved

in the transaction.

2. Vehicle description.

3. A statement that the vehicle is purchased for resale.

4. Date and signature of the purchasing dealer, their

employee or authorized representative.

5. Dealers must include their dealer license numbers from

the appropriate licensing jurisdiction.

6. The document must include a statement that the trade

occurred to meet a specific customer’s preference.

A sample dealer trade resale certificate can be found in Appen-

dix B. Dealers are not required to submit copies of the resale

certification document while filing their return. They must

retain the resale certification as required in OAR 150-317-1410:

Motor Vehicle Resale Certificate—Documentation Required.

Wholesale or retail sale of groceries

For purposes of the CAT, “groceries” are food and food

items that would be eligible for purchase with Supplemental

Nutrition Assistance Program (SNAP) benefits. Essentially,

groceries are food and beverages purchased for home con-

sumption. Food-producing seeds and plants for use in the

purchaser’s garden are also groceries. Receipts from the

wholesale or retail sale of groceries are excluded from the

seller’s commercial activity.

Retail sales of groceries. A taxpayer may exclude receipts

from the retail sale of groceries, provided that the sale meets

the following:

Requirement 1: The sale is of a grocery item that would be

eligible for purchase with SNAP benefits, and

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Requirement 2: The seller typically intends or expects that

the sale of food to the purchaser is for home consumption

by the purchaser.

A seller that typically sells grocery items to final consumers

for home consumption is determined based on factors such

as (but not limited to):

• Whether the average gross receipts from the sale of grocer-

ies is greater than the average gross receipts from the sale

of hot food or prepared food.

• Whether the business offers on-site dining facilities or

space, and the percentage of floor space dedicated to din-

ing compared to grocery shelves.

• Business advertising and marketing.

If a store’s receipts from the sale of hot food or hot prepared

food constitutes 80 percent or more of the total receipts that

the store realized from the sale of all food items, the store

doesn’t intend to sell, or typically sell, groceries to the final

consumer for home consumption; therefore, sales from the

store are not excludable as retail sales of groceries.

Wholesale sales of groceries. A taxpayer may exclude

receipts from the wholesale sale of groceries provided that

the sale meets all of the following requirements:

1. The sale is a wholesale sale.

2. The sale is of a food item that would be eligible for pur-

chase with SNAP benefits, and is in a form that can be

resold to the end consumer for home consumption.

3. The sale must be made for the purpose of reselling the

food item, without processing, to the final consumer for

consumption at home. Note: Processing means trans-

forming or changing the physical characteristics of the

food item, including incorporation or consumption of an

item as an ingredient or component in the production or

manufacture of another item.

4. The taxpayer making the wholesale sale must obtain

written certification from the purchaser that the grocery

items will be resold at retail without processing and

are intended for, or typically purchased by, the final

consumer for home consumption.

Any document may serve as verification, provided that it

contains the date of the purchase, the purchaser’s name and

address, the items purchased and purchase amount, and ver-

ification from the purchaser of the amount of the purchase

that will be resold, without processing, to the final consumer

for home consumption. A wholesale seller isn’t required to

obtain separate verification if the purchase was made for the

purpose of resale without further processing, and

(A) The purchaser is a qualified SNAP retailer with a

current permit to accept SNAP benefits from the U.S.

Department of Agriculture; or

(B) The purchaser is a store that meets the required quali-

fications to be a SNAP retail food store under 7 U.S.C.

2012(o)(1), (2), (4) or (5).

The wholesale seller must retain documentation that, at the

time of sale, the items were sold and delivered to a purchaser

that meets the requirements in (A) or (B). See Appendix B for

additional wholesaler information including an out-of-state

resale certificate template.

Filing checklist and reminders

• Rounding to whole dollars. Enter amounts on the return

and accompanying schedules as whole dollars only

by rounding to the nearest whole dollar amount. (For

example, $4,681.55 becomes $4,682; and $8,775.22 becomes

$8,775).

• Due date of your return. Returns are due by the 15th day

of the fourth month following the end of the tax year.

When the 15th day falls on a Saturday, Sunday, or Oregon

legal holiday, the due date is the next business day.

• Extensions. More time to file doesn’t mean more time to

pay your tax. To avoid penalty and interest, pay tax due

prepayments online, or by mail with Form OR-CAT-V, on

or before the original due date of your return.

Note: You must submit your extension before the return

filing deadline. Filing a payment voucher, Form OR-CAT-V

isn’t an extension of time to file your tax return. If you’re

making an extension payment by mail, send the payment

to: Oregon Department of Revenue, PO Box 14950, Salem

OR 97309-0950. Include on your check:

○

Designated CAT entity. Enter the legal name and FEIN.

If you’re a sole proprietorship without a FEIN, enter your

name and SSN.

○

“Extension.”

○

Tax year.

○

Daytime phone.

• Payments.

○

Estimated payments and prepayments. Identify all

estimated payments claimed by completing Schedule

OR-ES-CAT on pages 5 and 6 of your return. List all pay-

ments that were submitted prior to filing your return.

Include the name and FEIN of the entity that submitted

each payment. Missing or incomplete information on

payments made by an affiliate could result in a billing.

○

Online payments. You can log into your Revenue Online

account and make a payment. If you make a non-logged

in payment, you will need the CAT Account ID. If you

don’t know your CAT Account ID, you can find it by

logging into your Revenue Online account. Your CAT

Account ID can also be found on letters from the Depart-

ment regarding your entity’s CAT account.

○

Making electronic payments with your e-filed return.

We accept electronic payments when e-filing your

original return.

○

Making check or money order payments with your

paper return. Make your check or money order payable

to Oregon Department of Revenue. Write the following

on your check or money order:

— Federal employer identification number (FEIN) or

Social security number (SSN) if a sole proprietor.

— Tax year.

— Daytime phone.

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

○

To speed up processing:

— Don’t use Form OR-CAT-V payment voucher.

— Don’t staple payment to the return.

— Don’t send cash or postdated checks.

— Don’t use red or purple or any gel ink.

○

Sending check or money order payments separate from

your return. Follow the instructions above, except don’t

include with your return. Mail separate payments with

Form OR-CAT-V to:

Oregon Department of Revenue

PO Box 14950

Salem OR 97309- 0950

Don’t use this address for filing your return.

• Assembling and submitting your return. Submit your

Oregon return forms in the following order:

1. Form OR-CAT, Oregon Corporate Activity Tax Return;

2. Schedule OR-AF-CAT, Schedule of Affiliates;

3. Schedule OR-EXC-CAT, Exclusions from commercial

act ivity.

Tax-due returns, without payment voucher, mail to:

Oregon Department of Revenue

PO Box 14790

Salem OR 97309-0470

Refunds or no tax-due returns, mail to:

Oregon Department of Revenue

PO Box 14777

Salem OR 97309-0960

Estimated tax payments

Requirements. Oregon CAT estimated payment require-

ments aren’t the same as federal estimated tax payment

requirements. You must make estimated tax payments if

you expect to owe tax of $5,000 or more.

If you don’t make estimated payments as required, you may

be subject to a quarterly underpayment penalty.

Payment due dates

Estimated tax payments are due quarterly, as follows:

Calendar year filers: April 30, July 31, October 31, and Janu-

ary 31.

Fiscal year filers: The last day of the 4th, 7th, and 10th month,

and the last day of the first month following the end of your

tax year.

If the due date falls on a Saturday, Sunday, or Oregon legal

holiday, use the next regular business day.

Payment options

Important: For details about making payments with your

return, see “Filing checklist.”

Estimated payments may be made by electronic funds

transfer (EFT), online, or by check. You can make EFT pay-

ments through Revenue Online or through your financial

institution. To learn more about how to make payments, visit

our website. If you pay by EFT, don’t send Form OR-CAT-V,

Oregon Corporate Activity Tax Payment Voucher.

Mail. If paying by mail, send each payment with a Form

OR-CAT-V, payment voucher, to: Oregon Department of

Revenue, PO Box 14950, Salem OR 97309-0950. Include on

your check:

• Federal employer identification number (FEIN) or Social

security number (SSN) if a sole proprietor.

• Tax year.

• Daytime phone.

Estimated payments worksheet (see instructions

below worksheet)

Line 1. Oregon commercial activity after

exclusions. 1.__________

Line 2. Apportioned expenses. (greater of

cost inputs or labor costs). 2.__________

Line 3. Subtraction percentage. 3. 0.35

Line 4. Cost subtraction. Multiply line 2

by line 3. 4.__________

Line 5. Taxable commercial activity.

Subtract line 4 from line 1. 5.__________

Line 6. Commercial activity threshold. 6. $1,000,000

Line 7. Taxable commercial activity in

excess of $1 million threshold.

Subtract line 6 from line 5. 7.__________

Line 8. Tax rate. 8. 0.0057

Line 9. Gross corporate activity tax.

Multiply line 7 by line 8. 9.__________

Line 10. Base tax. 10. $250

Line 11. Annual corporate activity tax.

Add line 9 to line 10. 11.__________

Line 12. Estimated payment amount.

Divide line 11 by the number of

estimated payments. 12.__________

Instructions for estimated payments

Line 1: Amount of commercial activity sourced to Oregon.

Determine the total amount of commercial activity sourced

to Oregon that the business realized over the course of the

year. Don’t include receipts from items that are specifically

excluded from commercial activity.

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Line 2: Apportioned expenses. You can claim the greater of

your labor costs or cost inputs. Remember that expenses can’t

be claimed if they are not associated with commercial activ-

ity. For example, if you have costs associated with receipts

you are excluding from commercial activity, you can’t claim

those costs.

• Labor costs means total compensation of all employees,

not to include compensation paid to any single employee

in excess of $500,000.

• Cost inputs means the cost of goods sold as calculated

in arriving at federal taxable income under the Internal

Revenue Code.

Line 4: Cost subtraction. The amount of the cost subtraction

is limited to 95 percent of your commercial activity. This

means that your cost subtraction can’t be more than the

amount on line 1 multiplied by 95 percent.

Line 5: Taxable commercial activity. If your taxable com-

mercial activity is equal to or less than $1,000,000, stop. You

don’t need to make any estimated payments.

Line 12: Estimated payment amount. Divide line 11 by the

number of installment payments. For most businesses, this

will require four installments.

Example 1

TV Mart has $10 million of Oregon commercial activity.

TV Mart has $3,999,996 of labor cost and $3,714,282 of cost

inputs. TV Mart computes its Oregon estimated payments

as follows:

Line 1. Oregon commercial activity after

exclusions. 1. $10,000,000

Line 2. Expenses. (greater of cost inputs or

labor costs). 2. $3,999,996

Line 3. Subtraction percentage. 3. 0.35

Line 4. Cost subtraction. Multiply line 2

by line 3. 4. $1,399,999

Line 5. Taxable commercial activity.

Subtract line 4 from line 1. 5. $8,600,001

Line 6. Commercial activity threshold. 6. $1,000,000

Line 7. Taxable commercial activity in

excess of $1 million threshold.

Subtract line 6 from line 5. 7. $7,600,001

Line 8. Tax rate. 8. 0.0057

Line 9. Gross corporate activity tax.

Multiply line 7 by line 8. 9. $43,320.00

Line 10. Base tax. 10. $250

Line 11. Annual corporate activity tax.

Add line 9 to line 10. 11. $43,570.00

Line 12. Estimated payment amount.

Divide line 11 by the number of

estimated payments. 12. $10,893.00

Seasonal taxable commercial activity

Underpayment charges won’t be imposed if each estimated

payment is equal to or more than 22.5 percent of the total

amount of Oregon taxable commercial activity. Seasonal

commercial activity installments are calculated as follows:

1. Taxable commercial activity for all

months during the taxable year. 1.__________

2. Divide line 1 by the base period

percentage

for all months during the

taxable year. 2.__________

3. Determine the tax on line 2. 3.__________

4. Multiply line 3 by the base period

percentage for the filing month and all

months during the taxable year

preceding the filing month. 4.__________

Taxpayers may only calculate seasonal commercial activity if the base period

percentage for any six consecutive months of the taxable year is at least 70 percent.

The base period percentage for any period of months is the average percent that

the taxable commercial activity for the corresponding months in each of the three

preceding taxable years bears to the taxable commercial activity for the three pre-

ceding years.

Unitary group returns

If a unitary group CAT return is filed, any underpayment

shall be computed on a combined basis. Each entity of the

unitary group shall be jointly and severally liable for the

payment of the estimated tax liability.

Return instructions

Heading and checkboxes

Fiscal year beginning and fiscal year ending. CAT taxpayers

who use a fiscal tax year other than the calendar year for

federal tax purposes under Internal Revenue Code Section

441 must use their fiscal year for CAT.

Calendar year filers should leave these fields blank.

Extension checkbox. Check this box if you submitted an

extension.

Amended checkbox. Check the amended box if this is an

amended return.

Alternative apportionment request included. Check this

box if you have included a request for alternative appor-

tionment with your return. See Appendix C for complete

information. This box is used to denote requests only. You

may not use an alternative apportionment method until the

department approves your request in writing.

Accounting period change checkbox. Check this box only

if both of the following apply:

The CAT return covers a period of less than 12 months; and

The short-period return is due to a qualified change in

accounting period per IRC §§441 to 444.

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Note: A short-period return doesn’t automatically constitute

a qualified change in accounting period. A taxpayer that isn’t

engaged in commercial activity for the entire year shouldn’t

check this box. This includes subsidiaries that join or leave

a combined filing group, and newly formed or dissolved

entities.

Short year checkbox. Check this box if you are filing a short

year return. A short year is a tax year of less than 12 months.

Most short-year returns must prorate the tax rate threshold

of $1 million provided in ORS 317A.125 and 317A.137 as fol-

lows: Number of days in the short period divided by 365

days multiplied by $1 million. The $500,000 annual labor

cost limit for any single employee must also be prorated.

Proration is not required for short-year returns filed for

newly formed or dissolved entities that were not engaged

in commercial activity for the entire year.

Short year dates. Enter the dates that your tax year began

and ended.

Legal name of designated CAT entity. Enter the legal name of

designated CAT entity (sole proprietor—complete line below)

FEIN. Enter the federal employer identification number

(FEIN) of the entity named on the Oregon return.

First name (if sole proprietorship), initial, last name, and

SSN. If you’re a sole proprietorship without an FEIN, enter

your name and Social Security number (SSN). Only list

either an FEIN or an SSN, not both.

Deceased. If you’re filing for someone who died in 2022,

check the “Deceased” box.

DBA. If the entity is doing business under a different name,

for example, DBA or ABN, enter that name.

Current address, city, state, zip code, country (if other than

US). Always enter the entity’s current address. If the address

for the year you’re filing was different, don’t use the old

address.

Business information

A. Incorporated in (state), incorporated on (date). Enter

the state in which your entity was incorporated and the

date it became incorporated on.

B. State of commercial domicile. Enter in the state of your

commercial domicile.

C. Business activity code. Refer to the current list of North

American Industry Classification System (NAICS) codes

found with your federal tax return instructions.

D. Tax entity type. Enter the code from the following list

that matches the tax entity type of your designated CAT

entity.

Code Entity type

CC C corporation

SC S corporation

PA Partnership

SP Sole proprietorship

LC LLC organized as a corporation

LP LLC organized as a partnership

LL Limited liability partnership

AT Association/trust

QS Qualified subchapter S subsidiary

SM Single-member LLC

OF Other foreign entity

E. Legal entity type. Enter the legal entity type if it is dif-

ferent from your tax entity type.

F. Consolidated federal return. Check this box if you filed

a consolidated federal return. Include a list of the corpo-

rations included in the consolidated federal return with

your Oregon CAT return as an attachment.

Combined Oregon return. Check this box if this is a

combined Oregon CAT return.

Entities included in consolidated federal return, but not

in Oregon return. Check this box if it applies. Include a

list of entities included in the consolidated federal return

that aren’t included in this Oregon CAT return. List each

entity’s name and FEIN. Include this attachment with

your Oregon CAT return.

Entities included in combined Oregon CAT return, but

not in federal return. Check this box if it applies. Include

each entity’s name and FEIN as an attachment with your

Oregon CAT return.

Elect to file as modified unitary group. Check this box

if you are electing to exclude non-U.S. members with

no commercial activity, or amounts realized but by

definition are excluded from commercial activity, that

is sourced to Oregon.

G. Name and FEIN of parent corporation, if different than

designated CAT entity (if applicable). If the filing corpo-

ration (shown above as legal name) is a subsidiary in an

affiliated group, or a subsidiary in a parent-subsidiary

controlled group, enter the name and FEIN of the parent

corporation. For definition of a subsidiary in an affili-

ated group or a parent-subsidiary controlled group, see

federal Form 1120, Schedule K.

H. Number of affiliates included in this return (You must

include Schedule OR-AF-CAT if this is a combined

return). Enter the total number of affiliates doing busi-

ness in Oregon that are included in this return. Both the

designated entity and the entities on the OR-AF-CAT

should be included in the count.

I. List the tax years for which federal waivers of the stat-

ute of limitations are in effect and dates which waivers

expire. Include a statement with your return if you need

more space than the return provides.

J. List the tax years for which your federal income attribut-

able to Oregon commercial activity was changed by an

IRS audit or by an amended federal return filed during

this tax year.

K. If first return, indicate if you are a new business or a

successor to a previous business. Enter the name and

FEIN of the previous business.

Page 8 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

L. If final return, indicate: o Withdrawn o Dissolved

o Merged or reorganized. Enter the name and FEIN of

merged or reorganized business.

M. o Financial institution. Check this box only if the entity

is a financial institution. CAT defines financial institu-

tions under ORS 314.610 except CAT excludes credit

unions from this definition.

N. o Insurer. Check this box if the entity is an insurer.

CAT defines insurers as any domestic, foreign, or alien

insurer, any interinsurance and reciprocal exchange

as found in Corporate Excise Tax, ORS 317.010. The

definition of insurers doesn’t include title insurers or

health care service providers operating pursuant to ORS

750.005 to 750.095. Foreign or alien insurers subject to the

Oregon retaliatory tax under ORS 731.854 & 859 are an

excluded person not subject to the CAT.

O. Farming operation. Check this box if the entity is a

farming operation. CAT defines farming operation as

an entity doing business in a sector described under

codes 111, 112 or 115 of the North American Industry

Classification System.

Line instructions

1. Oregon commercial activity plus exclusions. Report the

Oregon sourced commercial activity plus exclusions

that are taken on line 2. Commercial activity (on line

3) means the fair market value of all amounts realized

in the regular course of a taxpayer’s trade or business

that meet the transactional test in OAR 150-314-0335(5).

This can include, but isn’t limited to, money, property

received, debt forgiven, and services rendered. Com-

mercial activity doesn’t include amounts that only meet

the functional test in OAR 150-314-0335(6).

2. Total exclusions from commercial activity (attach sched-

ule OR-EXC-CAT). Use Schedule OR-EXC-CAT to report

the amount and description code of each exclusion. Use

the description code from the list in Appendix A. The

total of all exclusions is entered on Form OR-CAT, line 2.

3. Oregon commercial activity. Subtract line 2 from line 1

to determine Oregon commercial activity.

Substitute method checkbox. Check box if electing

to determine your CAT subtraction using the substi-

tute method and complete lines 4 through 8 using the

instructions for the substitute method. Leave unchecked

to determine your CAT subtraction using the general

method and complete lines 4 through 8 using the

instructions for the general method.

4. Cost inputs. “Cost inputs” means the cost of goods

sold (COGS) as calculated in arriving at federal taxable

income under the Internal Revenue Code.

General method. Report the excess of total cost inputs

everywhere over the amount of cost inputs that are

ineligible costs. Ineligible costs are expenses from

transactions among members of a group, as excluded

under ORS 317A.106 or cost inputs that are attributable

to receipts from an item that wouldn’t be commercial

activity if sourced to Oregon.

Substitute method. Report total cost inputs everywhere

reduced by expenses from transactions among members

of a group, as excluded under ORS 317A.106.

• Farming operations. For a farming operation that

doesn’t report cost of goods sold for federal tax

purposes, “cost inputs” means operating expenses,

excluding labor costs.

5. Labor costs (not to exceed $500,000 for any single

employee). Labor costs include most types of compen-

sation paid to employees, such as wages, health insur-

ance benefits, retirement benefits, and any other fringe

benefits, but it doesn’t include the employer’s portion of

payroll taxes paid or compensation in excess of $500,000

paid to any single employee.

For purposes of the CAT, “employee” means an individ-

ual who provides services under the control of another

person or organization. Generally, an individual will be

considered an employee if the person or organization

that receives the services is subject to industrial accident

insurance, unemployment compensation, federal Social

Security, or federal tax withholding for that individual.

“Employees” doesn’t include:

• Partners in a partnership who receive guaranteed

payments or distributive income.

• Members in a limited liability company (LLC) who

receive guaranteed payments or distributive income.

• Statutory employees described in the Internal Rev-

enue Code (IRC) Section 3121(d)(3).

• Independent contractors as defined in ORS 670.600.

General method. Report the excess of total labor costs

everywhere over the amount of labor costs that are ineligi-

ble. Ineligible costs are expenses from transactions among

members of a group, as excluded under ORS 317A.106 or

labor costs that are attributable to receipts from an item that

wouldn’t be commercial activity if sourced to Oregon.

Substitute method. Report total labor costs everywhere

reduced by expenses from transactions among members

of a group, as excluded under ORS 317A.106.

7. Apportionment percentage of subtraction. Include an

attachment showing calculations. You must include a

percentage amount on line 7 or your subtraction may

be disallowed.

General method. Report the filing entity’s Oregon

apportionment percentage. Refer to ORS 317A.119(3) for

details on determining the proper percentage.

Enter 100.0000 if all commercial activity is sourced to

Oregon.

Rounding. When computing the percentage, round the

percentage to four decimal places. For example, 12.34558

percent should be 12.3456 percent.

Page 9 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

If you are filing as an entity that is identical to the entity

or the group of entities reporting on the apportionment

schedule filed for purposes of Oregon income or excise

tax, report the apportionment percentage included on

your most recent Oregon income or excise tax return

covering a 12-month period.

If you are filing as a group of entities that isn’t identi-

cal to the group of entities reporting on apportionment

schedule filed for the purposes of Oregon income or

excise tax, you must compute your Oregon apportion-

ment factor using the applicable apportionment method

under ORS chapters 314 or 317. Include an attachment

showing your calculations.

If you are a filing as a group of entities with members

subject to multiple apportionment methods, include an

attachment showing your calculations for each appor-

tionment method and a list of the entities included on

the return that each apportionment method applies to.

Substitute method. You may, in lieu of calculating and

apportioning eligible costs, elect to approximate and appor-

tion eligible costs by means of the commercial activity ratio.

Calculate the commercial activity ratio as follows:

Divide commercial activity sourced to Oregon on line 3

by the sum of commercial activity everywhere and the

following amounts excluded under ORS 317A.100(1)(b):

(Q), (Y), (AA), (DD), (EE), (TT), and (VV). Receipts from

transactions among unitary group members are not

included in either the numerator or denominator.

8. Multiply line 6 by line 7. This is your CAT subtraction.

If you are a filing as a group of entities with members

subject to multiple apportionment methods, you must

figure your CAT subtraction as follows:

• Separate the group into subgroups. Each subgroup

consists of members that use the same apportion-

ment method.

• Separate the costs reported on line 4 or 5, whichever

is greater, and assign them to each subgroup based

on the costs attributable to the members of that

subgroup.

• Multiply the costs assigned to each subgroup by 35

percent. This is the subgroup’s eligible costs.

• Multiply the subgroup’s eligible costs by the sub-

group’s apportionment factor. This is the CAT sub-

traction attributable to the subgroup.

• Sum the CAT subtractions attributable to each sub-

group and report the amount on line 8. Include an

attachment showing your calculations.

Refer to OAR 150-317-1200 for further details on calculat-

ing your subtraction.

10. Subcontractor exclusion (ORS 317A.122). If you are a

general contractor and incurred labor costs for single-

family residential construction located in Oregon, you

may qualify for the subcontractor labor payment exclu-

sion. The exclusion is 15 percent of the labor costs paid

to a subcontractor. It doesn’t include payments made for

materials, land or permits and isn’t allowed for payments

between subcontractors. Single-family residential construc-

tion means the construction of new single-family housing

such as single-family detached or semidetached houses

and townhouses or row houses where each housing unit:

• Is separated from the adjacent unit by a ground-to-

roof wall;

• Has no housing units constructed above or below;

• Doesn’t share heating or air-conditioning systems;

and

• Doesn’t share utilities.

13. Taxable Oregon commercial activity in excess of $1 mil-

lion threshold. If you are filing a short-year return, the

$1 million threshold must be prorated for the number of

days to which the short year return is applicable. Your

threshold is calculated as follows: Number of days in

the short period divided by 365 multiplied by $1 mil-

lion. Subtract your prorated threshold from your taxable

Oregon commercial activity on line 11.

17. 2022 Estimated CAT payments and other prepayments

from Schedule OR-ES-CAT line 7. Include payments

made with extension. Report the total amount of

estimated tax payments, extension payments or other

prepayments for the 2022 tax year.

Schedule OR-ES-CAT Estimated Tax Payments and Other

Prepayments instructions: Fill in the total estimated

tax payments made before filing your Oregon return.

Include any payments made with Form OR-CAT-V on

lines 1–4. List name and FEIN of the payer only if dif-

ferent from the entity filing this return.

Note: Combined return filers. If estimated payments

were made under a different name, fill in the paying

entity’s name and FEIN on Schedule OR-ES-CAT for the

correct application of estimated payments.

Caution: Missing or incomplete information on payment

made by an affiliate could result in a billing.

• Enter overpayment of another year’s tax applied as a

credit against this year’s tax on line 5.

• Enter payments made with your extension or other

prepayments on line 6.

• Carry the total from line 7 to Form OR-CAT, line 17.

20. Penalty due with this return. See section on Form OR-

QUP-CAT instructions.

Failure to register penalty. If you haven’t previously regis-

tered for the CAT include a penalty if you failed to register

for the CAT program within 30 days of exceeding $750,000

in commercial activity for the tax year. The penalty isn’t to

exceed $100 per month per person or unitary group that has

failed to register up to a maximum of $1,000 for the year. To

calculate your penalty, take the date on which your com-

mercial activity exceeded $750,000 and add 30 days. For the

remaining months of the taxable year, include a $100 penalty,

Page 10 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

not to exceed $1,000. (ORS 317A.131) You may use the work-

sheet below to calculate this penalty.

Line 1 Date exceeding $750,000 xx/xx

Enter $100 for each month that is applicable based

on line 1

January N/A

Line 2 February $100.00

Line 3 March $100.00

Line 4 April $100.00

Line 5 May $100.00

Line 6 June $100.00

Line 7 July $100.00

Line 8 August $100.00

Line 9 September $100.00

Line 10 October $100.00

Line 11 November $100.00

Line 12 December $100.00

Line 13 Subtotal $1,100.00

Line 14 Maximum of $1,000 $1,000.00

Line 15 Enter the lesser of line 13 or 14 $1,000.00

23. Amount of refund you want applied to your estimated

tax account. You may elect to apply part or all of your

refund to your next year’s estimated tax payments. Fill

in the amount you want to apply. Your election is irrevo-

cable. Elected amounts that are attributable to estimated

tax payments received prior to the following year’s

first quarter estimated tax due date will be applied as

a timely first quarter installment of the following year.

Elected amounts attributable to payments received after

the following year’s first quarter estimated tax due date

will be applied to the following year’s estimated tax

account as of the date the payment is received.

Schedule OR-AF-CAT instructions

If you file a combined Oregon CAT return you must com-

plete Schedule OR-AF-CAT and submit it with your Oregon

return. This form is listed at www.oregon.gov/dor.

Schedule OR-AF-CAT should list only those affiliates with

Oregon commercial activity that are included in the com-

bined Oregon CAT return. Don’t include the designated CAT

entity on the Schedule OR-AF-CAT.

Report the following on Schedule OR-AF-CAT:

• Name and address of each affiliate with Oregon com-

mercial activity.

• FEIN.

• Date the affiliate became part of the unitary group only if

this occurred during the tax year being reported.

• Date the affiliate left the unitary group only if this

occurred during the tax year being reported.

• Amount of Oregon commercial activity.

• Affiliate’s business activity code.

• Enter the two letter code from the following list that

matches the tax entity type of the affiliate.

Code Entity type

CC C corporation

SC S corporation

PA Partnership

SP Sole proprietorship

LC LLC organized as a corporation

LP LLC organized as a partnership

LL Limited liability partnership

AT Association/trust

QS Qualified subchapter S subsidiary

SM Single-member LLC

OF Other foreign entity

• Enter the two letter code if the affiliate’s legal entity type

if it is different from their tax entity type.

• Include as many schedules as necessary to list all affiliates

in your CAT unitary group.

Schedule OR-EXC-CAT instructions

Use this form to report exclusions from commercial activity

on your Oregon Corporate Activity Tax Return. Use codes

from the Appendix A to identify which exclusions you are

claiming. If you are claiming multiple exclusions, list out

each one individually. Make a copy of this form if you have

more than 9 exclusions from commercial activity.

Report the following on the Schedule OR-EXC-CAT:

• Exclusion code.

• Exclusion amount.

• Total amount of exclusions.

Form OR-QUP-CAT instructions

You must make estimated tax payments if you expect to

owe tax of $5,000 or more. Failure to make the quarterly esti-

mated payments may result in a 5% penalty being assessed

on the amount of underpayment.

Line 3 exceptions

Quarterly underpayment penalty won’t be imposed if each

estimated tax payment is equal to or more than 25 percent

of any one of the following:

• For tax years beginning on or after January 1, 2022, 90

percent of the tax for the tax year. Use exception 1 on Form

OR-QUP-CAT.

• Your estimated payments are equal to or greater than 100

percent of your prior year CAT liability. Use exception 2

on Form OR-QUP-CAT.

• An amount equal to 90 percent of the tax computed on

annualized taxable commercial activity. Use exception 3

on Form OR-QUP-CAT.

• An amount equal to 90 percent of the amount obtained by

applying Internal Revenue Code §6655(e)(3)(C) to Oregon

Page 11 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

taxable commercial activity. Use exception 4 on Form

OR-QUP-CAT.

The department won’t assess penalties for underestimating

quarterly payments if the business has made a good-faith

effort to comply. The department also won’t assess a penalty

for failure to make a quarterly payment if a business doesn’t

have the financial ability to make the estimated payment. A

good-faith effort can be demonstrated by the extent of the

taxpayer’s efforts to accurately estimate and pay the required

quarterly installment. Use exception 5 on Form OR-QUP-

CAT for good-faith effort. Business taxpayers should keep

documentation showing:

• The taxpayer can show that they had no ability to deter-

mine whether they will have CAT liability for the 2022

tax year, after taking into consideration exclusions and

subtractions provided in ORS Chapter 317A.

• The taxpayer made a reasonable estimate of the install-

ment based on information available to them at the time.

• The taxpayer relied on information contained in a pro-

posed administrative rule. Taxpayers must use the best

information available and document all information and

assumptions relied upon.

Taxpayers are not required to submit documentation to the

department unless requested.

Part 1—Figuring the underpayment

Line 4: Enter the installment amount from line 10, 12 or 13

for each quarter.

Line 5: Enter the amount of estimated tax paid or credited

for each quarter.

Line 6: Enter the amount of overpayment from the previous

quarter (see line 8).

Line 7: Enter the total tax paid (line 5 plus line 6).

Line 8: For each quarter that line 4 is less than line 7, subtract

line 4 from line 7.

Line 9: For each quarter that line 7 is less than or equal to

line 4, subtract line 7 from line 4.

Part 2—Figuring the required installments

Line 10: Divide line 1 by 4 and multiply the result by 90%.

Line 11: Multiply your prior year CAT (line 2) by 25% for

each quarter.

Line 12: If you compute tax liability on an annualized basis,

enter the installment amounts from the annualized method

worksheet for each quarter.

Line 13: If you have seasonal commercial activity, enter the

tax attributable to each quarter’s recurring seasonal activity.

Exception 3 Worksheet—Figuring annualized commercial

activity

If you compute your tax liability on an annualized basis,

use this worksheet to determine your required quarterly

installments.

Part 3—Penalty on underpayments

Line 19: Enter the amount of underpayment from line 9 for

each quarter. If there was no underpayment, enter 0.

Line 20: For each quarter, multiply line 19 by 5%.

Line 21: Add the amount from line 20 for each quarter. This

your total underpayment penalty for the year.

Example

Your tax liability at the end of the year was $10,000 and you

didn’t pay at least $2,250 ($10,000 tax ÷ 4 quarters = $2,500

and 90% of $2,500 is $2,250) in each quarter. Your penalty is

calculated for each quarter of estimated tax payment.

End of year tax liability $10,000

Divide by four ÷ 4

Quarterly estimated payments 2,500

Multiply by 90% 0.90

Required minimum quarterly payment 2,250

Payments made:

Quarter 1 1,800

Quarter 2 2,250

Quarter 3 2,500

Quarter 4 1,300

Penalty must be calculated on quarters 1 and 4.

Quarter 1 minimum estimated payment due 2,250

Less payment made (1,800)

Underpayment 450

Multiply by 5% x 0.05

Quarter 1 penalty 23

Quarter 4 minimum estimated payment due 2,250

Less payment made (1,300)

Underpayment 950

Multiply by 5% x 0.05

Quarter 4 penalty 48

Do you have questions or need help?

www.oregon.gov/dor

503-945-8005

Cat.help.dor@ oregon.gov

languages.

Page 12 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Appendix A

2022 Form OR-CAT Corporate Activity Tax

Schedule OR-EXC-CAT codes

Exclusions from commercial activity

Description Citation Code

Interest income. ORS 317A.100(1)(b)(A) 700

Receipts from the sale, exchange or other disposition of an asset. ORS 317A.100(1)(b)(B) 701

If received by an insurer, federally reinsured premiums or income from transactions

between a reciprocal insurer and its attorney in fact.

ORS 317A.100(1)(b)(C) 702

Receipts from hedging transactions. ORS 317A.100(1)(b)(D) 703

Proceeds received attributable to the repayment, maturity or redemption of

the principal of a loan, bond, mutual, fund, certificate of deposit or marketable

instrument.

ORS 317A.100(1)(b)(E) 704

Principal amounts received under a repurchase agreement or loan. ORS 317A.100(1)(b)(F) 705

Contributions received by a trust, plan or other arrangement. ORS 317A.100(1)(b)(G) 706

Compensation received. ORS 317A.100(1)(b)(H) 707

Proceeds received from the issuance or sale a taxpayer’s own stock. ORS 317A.100(1)(b)(I) 708

Proceeds received from insurance policies owned by the taxpayer. ORS 317A.100(1)(b)(J) 709

Gifts or charitable contributions received, membership dues received by trade,

professional, homeowners’ or condominium associations, payments received

for educational courses, meetings or meals, or similar payments to a trade,

professional or other similar association, and fundraising receipts received by any

person when any excess receipts are donated or used exclusively for charitable

purposes.

ORS 317A.100(1)(b)(K) 710

Damages received as the result of litigation in excess of amounts that, if received

without litigation, would be treated as commercial activity.

ORS 317A.100(1)(b)(L) 711

Property, money and other amounts received or acquired by an agent on behalf of

another in excess of the agent’s commission, fee or other remuneration.

ORS 317A.100(1)(b)(M) 712

Tax refunds, other tax benefit recoveries and reimbursements. ORS 317A.100(1)(b)(N) 713

Pension reversions. ORS 317A.100(1)(b)(O) 714

Contributions to capital. ORS 317A.100(1)(b)(P) 715

Receipts from the sale, transfer, exchange or other disposition of motor vehicle fuel. ORS 317A.100(1)(b)(Q) 716

Federal and state excise taxes paid on cigarettes or tobacco products. ORS 317A.100(1)(b)(R) 717

Federal and state excise taxes paid on alcoholic beverages. ORS 317A.100(1)(b)(S) 718

Federal and state excise taxes paid on marijuana items. ORS 317A.100(1)(b)(T) 719

Local taxes collected by a restaurant or other food establishment on sales of

meals, prepared food or beverages.

ORS 317A.100(1)(b)(U) 720

Tips or gratuities collected by a restaurant or other food establishment and passed

on to employees.

ORS 317A.100(1)(b)(V) 721

Receipts from vehicle dealer trades to meet a specific customer’s preference or an

exchange of new vehicles between franchised motor vehicle dealerships.

ORS 317A.100(1)(b)(W) 722

Registration fees or taxes collected by a vehicle dealer at the sale or other transfer

of a motor vehicle, that are owed to a third party by the purchaser of the motor

vehicle and passed to the third party by the dealer.

ORS 317A.100(1)(b)(X) 723

Receipts from a financial institution for services provided to the financial institution

in connection with the issuance, processing, servicing and management of loans

or credit accounts, if the financial institution and the recipient of the receipts have

at least 50 percent of their ownership interests owned or controlled, directly or

constructively through related interests, by common owners.

ORS 317A.100(1)(b)(Y) 724

Amounts specified under ORS chapter 462 that must be paid to or collected by the

Department of Revenue as a tax and the amounts specified under ORS chapter

462 to be used as purse money.

ORS 317A.100(1)(b)(Z) 725

Page 13 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Appendix A (continued)

2022 Form OR-CAT Corporate Activity Tax

Schedule OR-EXC-CAT codes

Exclusions from commercial activity

Description

Citation Code

Receipts of residential care facilities as defined in ORS 443.400 or in-home care agencies

as defined in ORS 443.305, to the extent that the revenue is derived from or received

as compensation for providing services to a medical assistance or Medicare recipient.

ORS 317A.100(1)(b)(AA) 726

Dividends received. ORS 317A.100(1)(b)(BB) 727

Distributive income received from a pass-through entity. ORS 317A.100(1)(b)(CC) 728

Receipts from sales to a wholesaler in this state, if the seller receives certification

at the time of sale from the wholesaler that the wholesaler will sell the purchased

property outside this state.

ORS 317A.100(1)(b)(DD) 729

Receipts from the wholesale or retail sale of groceries, including receipts of a

person that owns groceries at the time of sale and compensation of any consignee

engaged in effecting the sale of groceries on behalf the owner of groceries, but

only to the extent that the compensation relates to grocery sales.

ORS 317A.100(1)(b)(EE) 730

Receipts from transactions among members of a unitary group. ORS 317A.100(1)(b)(FF) 731

Moneys, including public purpose charge moneys collected under ORS 757.612

and costs of funding or implementing cost-effective energy conservation measures

collected under ORS 757.689, that are collected from customers, passed to a

utility and approved by the Public Utility Commission and that support energy

conservation, renewable resource acquisition and low-income assistance programs.

ORS 317A.100(1)(b)(GG) 732

Moneys collected by a utility from customers for the payment of loans through

on-bill financing.

ORS 317A.100(1)(b)(HH) 733

Surcharges collected under ORS 757.736. ORS 317A.100(1)(b)(II) 734

Power Act Exchange credits or pursuant to any settlement associated with the

exchange credit.

ORS 317A.100(1)(b)(JJ) 735

Moneys collected or recovered for fees payable under ORS 756.310, right-of-way

fees, franchise fees, privilege taxes, federal taxes and local taxes.

ORS 317A.100(1)(b)(KK) 736

Charges paid to the Residential Service Protection Fund. ORS 317A.100(1)(b)(LL) 737

Universal service surcharge moneys collected or recovered and paid into the

universal service fund.

ORS 317A.100(1)(b)(MM) 738

Moneys collected for public purpose funding. ORS 317A.100(1)(b)(NN) 739

Moneys collected or recovered and paid into the federal universal service fund. ORS 317A.100(1)(b)(OO) 740

In the case of a seller or provider of telecommunications services, the amount of

tax imposed under ORS 403.200 for access to the emergency communications

system that is collected from subscribers or consumers.

ORS 317A.100(1)(b)(PP) 741

The amount of tax imposed under ORS 320.305 and of any local transient lodging

tax imposed upon the occupancy of transit lodging.

ORS 317A.100(1)(b)(QQ) 742

The amount of tax imposed under ORS 320.415 upon retail sales of bicycles. ORS 317A.100(1)(b)(RR) 743

The amount of tax imposed under ORS 307.872 upon the rental price of heavy equipment. ORS 317A.100(1)(b)(SS) 744

Farmer sales to an agricultural cooperative in this state that is a cooperative

organization described in section 1381 of the Internal Revenue Code.

ORS 317A.100(1)(b)(TT) 745

Revenue received by a business entity that is mandated by contract or subcontract

to be distributed to another person or entity if the revenue constitutes sales

commissions that are paid to a person who is not an employee of the business entity.

ORS 317A.100(1)(b)(UU) 746

Receipts from the sale of fluid milk by dairy farmers that are not members of an

agricultural cooperative.

ORS 317A.100(1)(b)(VV) 747

Receipts from the sale of prescription drugs sold by an “eligible pharmacy.” Senate Bill 1524 (2022) 748

Page 14 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Appendix B

Sample certificates

Oregon Corporate Activity Tax

Motor Vehicle Resale Certificate

For purposes of the Corporate Activity Tax (CAT), motor vehicle dealers may exclude receipts realized from the sale or

transfer of a motor vehicle to another vehicle dealer, provided that certain requirements are met. In order to qualify for the

exclusion, the transaction must meet the following requirements:

1. The transferor and transferee must be licensed motor vehicle dealers; and

2. The transfer must be of a new vehicle between franchised dealerships; or

3. The transfer must be made for the purpose of resale by the transferee vehicle dealer; and

4. The transfer must be based upon the transferee vehicle dealer’s need to meet a specific customer’s preference.

Because both the transferee and the transferor may be eligible to claim the exclusion, both motor vehicle dealers must retain

documentation demonstrating that the vehicle transfer meets the applicable requirements. In the case of new vehicle transfers

between franchised dealerships, documents prepared at the time of transfer will suffice. For trades made for the purpose of

resale to meet a specific customer’s request, any document will suffice, provided that it contains the following information:

1. Name, address, dealer license number, and federal tax identification number for both the seller and the purchaser.

2. Vehicle description, including Vehicle Identification Number (VIN), if one exists.

3. A statement that the vehicle is being transferred for resale in order to meet a specific customer’s preference.

4. The signature of the transferee vehicle dealer, the dealer’s employee, or authorized representative of the dealer.

5. Date of execution of the document.

The form below is provided by Department of Revenue as an example. Motor vehicle dealers are not required to use this

form. Any document containing all of the required information is sufficient.

Don’t submit the resale certificate documentation to the Department of Revenue when filing a return. Retain the

documentation for your records. You may be asked to provide documentation to verify the transfer meets the exclusion

requirements.

Page 15 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Oregon Corporate Activity Tax

Motor Vehicle Resale Certificate

To be completed and signed by the motor vehicle dealer receiving the qualifying motor vehicle

Transferee dealership name Dealership Federal Tax Identification number

Dealership license number Licensing jurisdiction

Transferee street address City, State, Zip

Year/Make/Model and VIN (if available)

I certify that the transfer of the above listed motor vehicle(s) was for the purpose of resale, and was based on my

dealership’s need to meet a specific customer’s preference.

Signature of dealer, employee or representative Date

Transferer motor vehicle dealer

Transferer dealership name Dealership Federal Tax Identification number

Dealership license number Licensing jurisdiction

Transferer street address City, State, Zip

This form shall be retained by both dealers and shall not be submitted to the Oregon Department of Revenue

as part of the tax return.

Page 16 of 20

150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Oregon Corporate Activity Tax

Are receipts from sales to Oregon wholesalers excludable?

Answer: A taxpayer may exclude receipts from sales to Oregon wholesalers if the wholesaler provides the taxpayer with

an out-of-state resale certificate showing that the purchased items will be resold out of the state. Any document may serve

as an out-of-state resale certificate, provided it contains the required information. Refer to the “Required documentation”

section below for information on the out-of-state resale certificate.

Information for sellers

A seller may only exclude receipts from a sale to a wholesaler in Oregon if the wholesaler provides the seller with an out-

of-state resale certificate. The seller must obtain an out-of-state resale certificate from the wholesaler at the time of the sale.

Refer to the “Required documentation” section below to ensure you have sufficient documentation to claim the exclusion.

Example: Rosslyn LLC manufactures widgets. Rosslyn sells widgets to Twinbrook Wholesalers for $10,000. Twinbrook

Wholesalers issues Rosslyn an out-of-state resale certificate at the time of the transaction. The out-of-state resale certificate

shows that Twinbrook will resell 80 percent of the purchased widgets to California and Nevada; and 20 percent of the

purchased widgets will be resold in Oregon. While Rosslyn realized $10,000 from the sale to Twinbrook, with an out-of-

state resale certificate, Rosslyn is able to exclude 80 percent ($8,000) of the receipts from the sale to Twinbrook. Rosslyn will

include 20 percent ($2,000) in their commercial activity.

Information for wholesalers

A wholesaler is a business entity primarily doing business by merchant distribution of tangible personal property to retailers

or other wholesalers. A wholesaler in Oregon who purchases property with the intent to resell the property outside of the

state may provide the seller with an out-of-state resale certificate. This certificate allows the seller to claim an exclusion for

the out-of-state resales, and must be provided at the time of the transaction. Any document may serve as an out-of-state

resale certificate, provided it contains the required information. Refer to the “Required documentation” section below for

information on the out-of-state resale certificate.

A wholesaler must determine the amount of purchased property that will be resold out of Oregon based on the facts at the

time it purchases the property. If, at the time of purchase, the wholesaler is unable to determine the amount of purchased

property that will be resold outside of Oregon, it may estimate the amount of property to be sold out of state using either the

approximation ratio or another method described below, if, at the time of the wholesale purchase, the ratio or other method

fairly and accurately reflects estimated out-of-state resales of property delivered from the wholesaler’s Oregon locations.

Approximation ratio

Commercial activity from Oregon sales in the prior year

Commercial activity from all sales in the prior year

The approximation ratio is a fraction. The numerator is the amount of commercial activity the wholesaler realized

from all sales to Oregon customers during the prior year. The denominator is the commercial activity realized from

all sales everywhere in the prior year.

Wholesalers located in multiple states may only include in the ratio commercial activity realized from sales of property

delivered from their Oregon locations. Sales of items delivered from a wholesaler’s locations outside of Oregon are not

included in the numerator or denominator of the ratio.

Example: Alpha Corporation is a wholesaler with one location in Klamath Falls, Oregon. In March 2021, Alpha purchases

tangible personal property from Indigo LLC, paying a total price of $500,000. At the time of the transaction, Alpha is unable

to determine the exact amount of tangible property that Alpha will resell outside of Oregon. In order to provide Indigo with

an out-of-state resale certificate, Alpha uses the approximation ratio based on Alpha’s 2020 commercial activity.

In 2020, Alpha realized a total of $2 million dollars of commercial activity from the sale of widgets delivered from its

Klamath Falls location to customers everywhere, including $100,000 to Oregon customers delivered from Alpha’s Klamath

Falls location. Alpha calculates the approximation ratio by dividing Oregon commercial activity by everywhere commercial

activity resulting in an approximation ratio of 0.05. ($100,000 ÷ $2,000,000 = 0.05)

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Alpha applies the approximation ratio of 0.05 to the purchase price ($500,000 x 0.05 = $25,000). Of the total $500,000 widget

purchase, Alpha approximates that $25,000 will be resold in Oregon, and $475,000 will be resold outside of Oregon. Alpha

provides Indigo with an out-of-state resale certificate documenting that $475,000 worth of the purchased widgets will be

resold outside of Oregon.

While Indigo realized $500,000 of commercial activity from the sale to Alpha, only $25,000 of receipts from the sale will be

included in Indigo’s Oregon commercial activity. Indigo will exclude $475,000.

Note: If, at the time of the wholesale sale, the approximation ratio does not fairly represent a wholesaler’s estimated out-

of-state sales, the wholesaler may not use the approximation ratio. However, a wholesaler may use a reasonable alternative

method that fairly and accurately reflects, at the time of the wholesale sale, the amount that the wholesaler estimates will be

resold outside Oregon. A wholesaler who uses an alternative method must document the alternative method used, including

how the method was determined, why the approximation ratio based on prior year’s resales from the wholesaler’s Oregon

locations is not a fair representation of the wholesaler’s sales at the time of the wholesale purchase, and retain certain informa-

tion. Once an alternative method has been used, the wholesaler must continue to use the same method, until the alternative

method is no longer a fair and accurate representation of the wholesaler’s out-of-state sales. Refer to OAR 150-317-1400 for

further requirements on using alternative methods.

Required documentation for out-of-state resale certificates

Any document may serve as an out-of-state resale certificate, provided that it contains:

• The wholesaler’s legal name and Oregon address;

• The wholesaler’s federal tax identification number;

• The date of the purchase;

• The total amount of purchased property;

• The purchase price paid by the wholesaler;

• The dollar amount of purchased property that the wholesaler will resell outside of Oregon; and

• The signature of the wholesaler, their authorized representative, or employee, certifying that the entity is a wholesaler, as

that term is defined in Oregon Revised Statute (ORS) 317A.100(1)(b)(DD).

The Oregon Department of Revenue has provided an out-of-state resale certificate form that wholesalers may provide tax-

payers to use to document excluded sales. Wholesalers are not required to use the department’s form. Any document with

all of the information listed above is sufficient.

Sellers must retain the certification for their records. Don’t submit the certificate to the Oregon Department of Revenue

unless requested.

Farming operations taxpayers seeking information about obtaining certificates from a broker or wholesaler for sales of

agricultural commodities, or who want to use industry average percentages, should consult the FAQ “How can farming

operations selling agricultural commodities demonstrate out-of-state-sales?”

Oregon Corporate Activity Tax

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Oregon Corporate Activity Tax

Out-of-State Resale Certificate for Sales to Wholesalers

A. Wholesaler information

B. Purchased property

Legal name

Oregon address

Federal tax identification number

Description of purchased property:

Date of purchase:

Total amount of purchased property:

Purchase price:

Amount purchased for resale out-of-state

(dollar amount):

Name of wholesaler, authorized representative, or employee

Signature of wholesaler, authorized representative, or employee

I hereby certify that the purchaser is a wholesaler primarily doing business by merchant distribution of

tangible personal property to retailers or other wholesalers.

Don’t attach or submit this form to the Oregon Department of Revenue as part of a tax return.

ORS 317A.100(1)(b)(DD)

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Appendix C

Oregon Corporate Activity Tax return OR-CAT

Alternative apportionment

Oregon law allows taxpayers to request an alternative

method of apportionment using the instructions below. You

must receive written authorization from the department

before using an alternative method of apportioning your

subtraction.

Administration

We will review the alternative apportionment request and

issue a decision letter.

If your alternative apportionment petition is denied, you

may appeal the denial of your petition to Oregon Tax Court

as provided in ORS 305.275.

If your alternative apportionment petition is approved, you

may amend your returns within the normal statute of limi-

tations. The approval of your petition will remain in effect

unless and until we revoke it during audit or you file a new

petition and receive our approval of the new proposal.

Allow at least 6 months for us to make a determination.

Also, note that all petitions for alternative apportionment

may result in additional review and documentation requests.

Instructions

• Your written petition for alternative apportionment can

be submitted with your original or amended return

(Method 1) or separate from your original or amended

return (Method 2).

• For administrative purposes, we prefer Method 2.

Method 1—Alternative apportionment petition

submitted with your original or amended return

• Check the alternative apportionment checkbox on the front

of the return. Failure to do so could result in your request

being overlooked. This box is to denote requests only. You

may not use an alternative apportionment method until

the department approves your request in writing.

• Include a written petition for alternative apportionment

with your original or amended return.

• Don’t complete the original or amended return using an

alternative method of apportionment unless/until that

alternative method of apportionment has been approved.

• Mail your petition to our normal return filing addresses.

See “Filing checklist.”

Note: Clearly identify that you’re requesting alternative

apportionment by writing the words “Alternative appor-

tionment request” at the top and adhere to all other require-

ments. Determinations to amended returns may take longer

to process.

Method 2—Alternative apportionment petition

submitted separately from your original or

amended return

• Your written petition must have the title “Alternative

apportionment request.”

• Mail your petition to: Oregon Department of Revenue,

CAT Section, 955 Center St NE, Salem OR 97301-2555.

Both methods of petition

• The petition must be signed by the taxpayer or the tax-

payer’s representative.

• The petition must fully explain the extent of the taxpayer’s

business activity in Oregon and why standard apportion-

ment doesn’t fairly and equitably represent the taxpayer’s

business activity in Oregon.

• Your petition must fully explain your proposed method of

alternative apportionment and explain why this proposed

method is more accurate in reflecting business activity in

Oregon than the standard formula.

• The petition must show how the Oregon return (Form

OR-CAT) would be completed, including the net tax

calculation, using the proposed method of alternative

apportionment.

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150-106-003-1 (Rev. 09-14-22) Form OR-CAT Instructions

Appendix D

Instructions for estimated payments if using the annualized method

If you don’t realize your commercial activity evenly through-

out the year, you may figure your required estimated pay-

ments using the annualized installment method.

Oregon Commercial Activity. Determine the total amount

of commercial activity sourced to Oregon that the business

realized year-to-date. Don’t include receipts from items that

are excluded from commercial activity.

Greater of cost inputs or labor costs for the tax year. You

are allowed to claim the greater of your labor costs or cost

inputs. Remember that expenses can’t be claimed if they are

not associated with commercial activity. For example, if you

have costs associated with receipts you are excluding from

commercial activity, you can’t claim those costs.

• Labor costs means total compensation of all employees,

not to include compensation paid to any single employee

in excess of $500,000.

• Cost inputs means the cost of goods sold as calculated

in arriving at federal taxable income under the Internal

Revenue Code.

Cost subtraction. The amount of the cost subtraction is lim-

ited to 95 percent of your commercial activity. This means

that your cost subtraction can’t be more than the total com-

mercial activity multiplied by 95 percent.

Taxable commercial activity. If your taxable commercial

activity after the $1,000,000 threshold is equal to or less then

zero, stop. You don’t need to make any installment payments

this quarter.

Annualization multiplier. This is 12 months divided by

the number of months in the period. Percentage applied.

This is the percentage amount you must pay to avoid

underpayment.

First quarter

First and second

quarter

First, second,

and third quarter

First, second,

third, and fourth

quarter

Line 1

Oregon commercial activity (year

to date, minus exclusions)

Line 2

Everywhere expenses (greater of

cost inputs or labor costs, year to

date)

Line 3 Subtraction percentage 0.35 0.35 0.35 0.35

Line 4 Multiply line 2 by line 3

Line 5

Apportionment percentage of

subtraction

Line 6

Cost subtraction (multiply line 4 by

line 5)

Line 7

Taxable commercial activity for each

period (subtract line 6 from line 1)

Line 8 Annualization multiplier 4 2 1.3 1

Line 9

Annualized taxable commercial

activity (line 7 multiplied by line 8)

Line 10 Commercial activity threshold $1,000,000 $1,000,000 $1,000,000 $1,000,000

Line 11

Annualized taxable commercial

activity over threshold (subtract line

10 from line 9)

Line 12

Estimated Oregon corporate

activity tax (multiply line 11 by

0.0057 and add $250)

Line 13

Percentage that applied for each

period

22.50% 45% 67.5 0% 90%

Line 14

Year-to-date required estimated

tax amount (multiply line 12 by line 13)

Line 15 Other prepayments

Line 16

Installment payment amount

(subtract line 15 from line 14)

Annualized commercial activity worksheet Table 1