The recent Oregon special session wasn’t all about police reform. Legislators also made important tweaks to the corporate activity tax for farmers in a bill, House Bill 4202, sponsored by State Rep. Cheri Helt, R-Bend.
Oregon’s corporate activity tax or CAT is a tax on the total amount a business realizes from transactions and activity in Oregon. It’s not a tax on profits. It’s a tax on money that comes in or what is called gross receipts. While the CAT may raise a lot of money for Oregon schools — it was hoped it would raise a $1 billion a year, businesses can get hit hard if they aren’t making a profit or have narrow profit margins. The tax is $250 plus 0.57% of Oregon commercial activity of more than $1 million.
Helt’s bill changed a couple of the ways the CAT hits farmers. It made a fix so that crop insurance payments for drought, wildfire or other disasters would not be included in gross receipts. It made a second fix that helped farmers get credit for expenses to reduce their tax liability. It made a third fix to help when a farmer’s commodities are commingled with others and it’s difficult to determine tax liability. The revenue impact to the state is estimated to be about $500,000 a year.
Some people wanted more comprehensive changes to the CAT, especially because many businesses have been struggling during the pandemic. This bill managed to pass with bipartisan support. It’s progress.
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