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Oregon: Tax-exempt entities with unrelated business income subject to corporate activity tax

Oregon: Tax-exempt entities, unrelated business income

Oregon’s corporate activity tax is effective beginning January 1, 2020.

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For purposes of the corporate activity tax (CAT) regime, the term “taxpayer” means any person or unitary group required to register, file or pay the tax under the CAT rules. The definition of a taxpayer specifically excludes “excluded persons” defined as including but not limited to, various IRC section 501 entities, certain hospitals, governmental entities, and any persons with commercial activity that does not exceed $750,000 for the calendar year, other than a person that is part of a unitary group with commercial activity in excess of $750,000 dollars. 

Although tax-exempt entities are generally “excluded persons,” if a tax-exempt entity has unrelated business income taxable under the Internal Revenue Code, it will be considered a CAT taxpayer. 

Those tax-exempt entities that are subject to tax on their unrelated business income must make estimated payments if their expected Oregon CAT tax liability will be more than $5,000.


Read a January 2020 report prepared by KPMG LLP

 

For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 | ruthmadrigal@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com

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