Oregon New Law Update 2020 FAQ (Oregon Department of Revenue)

Summary

The Oregon Department of Revenue answers questions from its 2020 New Law Update on payroll, personal income tax and the Corporate Activity Tax (CAT). The interest and penalty relief the governor announced on December 14, 2020, must be requested. The federal recovery rebate payments, including the $600 payment received in calendar year 2021, reduce the 2020 federal tax subtraction on the Oregon return, with no add-back. On Paycheck Protection Program (PPP) loans, Oregon is currently tied to the federal change allowing deductions for related expenses even though the loan is excluded from income, though the Legislature may decide otherwise in the 2021 session. Employers with fewer than 25 employees are not required to pay the 40 percent employer contribution for paid family and medical leave. CAT answers cover excluded items, fiscal years and sourcing.

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Full text

Oregon New Law Update

2020 Oregon new law update FAQ
General
Q1: Is the Oregon Department of Revenue offering continuing education credit (CE) for
attending the Oregon New Law Update presentations?
A1: Revenue doesn't usually issue CE; it’s usually issued through external organizations.
Revenue will not be issuing CE for this training. We will be posting a recording of the new law
update to our website that you may view at your meetings for CE.

Q2: Does the interest and penalty relief announced by the governor on December 14, 2020
need to be requested, or is the relief automatic?
A2: You will need to request the relief. Read the FAQ regarding the small business relief for
COVID-19.

Q3: What is the mailing address for vouchers this coming tax year?
A3: Oregon Department of Revenue
PO Box 14950
Salem, OR 97309-0950

Q4: Is a scanned wet signature considered a facsimile signature?
A4: Yes.

Payroll/withholding and special programs
Q5: If my company only employs me, and I would not take any type of leave as I'm
basically self-employed as a single member S-corporation with a wage, would I still have to
pay the family leave tax?
A5: The Oregon Employment Department is administering the Paid Family and Medical Leave
Insurance Program. They are in the process of developing policies related to the
administration of this program, with contributions scheduled to begin January 1, 2022. The
Department of Revenue will continue to update its website with frequently asked questions.
However, this question would be best directed to the Oregon Employment Department.

Q6: For marijuana tax, what does the first $11,125,000 received by the state pay for?
A6: These funds will go to Measure 91 recipients. Additional funds apply to the new Drug
Treatment and Recovery Services Fund.

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Q7: Will the paid family medical leave be mandatory for all employers, regardless of the
number of employees?
A7: Ultimately, the Employment Department will create the rules for this program. For more
information, visit their website or read their frequently asked questions. For questions, email
paidfamilyandmedicalleave@oregon.gov.
Employers with fewer than 25 employees are not required to pay the 40 percent employer
contribution. However, if an employer does pay the 40 percent employer contribution, they are
eligible to receive assistance grants.

Q8: Are 1099 NECs and 1099-MISC required to be filed electronically this year via iWire?
A8: OAR 150-314-0140 provides the full list of returns that are required to be electronically
filed. The Form 1099-MISC was already required to be filed in iWire. The new forms that are
required to be filed electronically include Form 1099-NEC and Form 1099-K. Penalties will be
assessed if a payer fails to file an information return, or files an incorrect or incomplete
information return for Form 1099-K or Form 1099-NEC beginning in tax year 2021. Forms are
due in January 2022.

Personal Income Tax (PIT)
Q9: The Oregon reconnect date is December 31, 2018. Does this mean any federal tax
changes made after this date (including those made in 2020) are, or are not, carried through
to Oregon returns? Do we need to make adjustments for 2020 federal tax law changes on the
Oregon return?
A9: Oregon has a running tie to the definition of federal taxable income, so any changes
Congress makes that impact federal taxable income, Oregon is tied to and you will not have an
adjustment on the Oregon return. However, for all other changes to federal law, Oregon is tied
to the laws as amended and in effect as of December 31, 2018.

Q10: Did Oregon tie to the tax extenders that were retroactively changed in December 2019
back to tax year 2020 (e.g., the 7.5 percent AGI floor for the medical expense deduction, the
deduction for mortgage insurance premiums, etc.)? It's not clear if Oregon ties to federal
law as of December 31, 2018, but this law was passed after that.
A10: Yes, Oregon is currently tied to the extenders for the 7.5 percent AGI floor for the medical
expense deduction and the deduction for mortgage insurance premiums, as both of those
impact federal taxable income (see above question about the rolling reconnect).

Q11: Can an individual with a 529 subtraction from a year prior to 2016 carry forward a
portion of that subtraction to tax year 2020?
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A11: No. The 529 subtraction has a four-year carryforward. If the contributions were made
prior to tax year 2016, they would expire prior to tax year 2020.

Q12: What is the deadline for making a 2020 Oregon 529/ABLE contribution in order to
receive the corresponding credit?
A12: The contributions must be made by the due date of the 2020 tax return or the date the
taxpayer files this return, whichever is earlier.

Q13: Is there a listing of all the credits that can be transferred from one taxpayer to another?
A13: Currently, there are three credits that are allowed by statute to be transferred. They are
the Agriculture Workforce Housing Credit, Bovine Manure Credit, and the Short-line Railroad
Credit. These three credits are listed in the instructions for Form OR-TFR and are explained
more fully in Publication OR-17.

Q14: When will the 2019 Oregon surplus kicker credit be released?
A14: There will not be a kicker on the 2020 return. If triggered, this credit will only be claimed
on tax returns for odd-numbered years.

Q15: Will the federal recovery rebate payment be an add-back on the Oregon return?
A15: The Oregon federal tax subtraction will be reduced by the recovery rebate payment.
There is no add-back required.

Q16: Will Oregon accept Form 1045 in lieu of an amended tax return for a net operating loss
(NOL)?
A16: Yes, federal Form 1045 will be accepted in lieu of having taxpayers file an amended
federal return just for Oregon. Taxpayers will file the amended Oregon return and the federal
Form 1045 to carry back the NOL.

Q17: How will Revenue handle the second round of federal recovery rebate payments?
Some taxpayers received the recovery rebate payment in calendar year 2020, and some will
receive it in calendar year 2021. Regardless of when received, will all second-round recovery
rebate payments be included in reducing the 2020 federal tax liability subtraction (line 10)
on the Oregon return?
A17: The first and second federal recovery rebate payments are an advance payment of a
refundable credit against 2020 federal tax. Each recovery rebate payment will be added
together to determine the amount to subtract from federal tax to determine the federal tax
subtraction.

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Q18: Will the $600 recovery rebate payment I received in calendar year 2021 be reported on
the 2020 Oregon return?
A18: The 2021 $600 recovery rebate payment is an advance payment of a 2020 federal
refundable credit; therefore, it is included in the calculation of the 2020 federal tax subtraction
amount.

Q19: What form number will the IRS issue for the second recovery rebate payment that
taxpayers should keep for their record?
A19: The IRS should be issuing Form 1444B for the second recovery rebate payment amount.

Q20: What if a Washington resident, who normally works in Oregon, telecommutes from
home. Is the income earned by the Washington resident taxable to Oregon?
A20: Per OAR 150-316-0165, the income earned by a nonresident employee outside of Oregon
is not taxable to Oregon. See the rule for exceptions for nonresidents whose services are
connected with the management or conduct of a business in Oregon.

Q21: Paycheck Protection Program (PPP) funds are tax free, federally. When will Oregon
decide if they tied to this or not?
A21: The appropriations bill passed by Congress in December 2020 allows deductions for
related expenses (wages, etc.) even though the PPP loan is excluded from income. Because the
taxability and deductibility of PPP affects federal taxable income, Oregon is currently tied to
these changes due to our rolling reconnect to federal taxable income. However, the Legislature
may decide to have a different treatment during the 2021 legislative session.

Corporate Activity Tax (CAT)
Q22: Is there a listing of the excluded items?
A22: Revenue’s CAT webpage provides information on many of the major exclusions but does
not have a separate list of all 48 excluded items. For the most current and detailed list of
excluded items, refer directly to the 2020 laws. Revenue’s CAT webpage also includes a link to
the law.

Q23: Will the excluded items be listed in the CAT return instructions?
A23: Yes, we plan to include the list of exclusions from commercial activity in the CAT
instructions.

Q24: How is CAT handled for a fiscal tax return? Do I use my fiscal year for the calculation?

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A24: The CAT is an annual calendar year tax. Businesses that use an alternate fiscal year must
still file and pay based on the calendar year. However, under HB 4202 (2020 first special
session) taxpayers may elect to use their most recent fiscal year information for purposes of
determining their labor cost, or cost input subtraction.

Q25: By registering for the CAT program, am I required to file an annual CAT tax return,
even if I don’t meet the $1 million of gross revenue?
A25: No. Entities that meet the $750k threshold are required to register, but they are not
required to file a return if they do not meet the filing threshold of $1 million in Oregon
commercial activity.

Q26: Is selling residential rental units considered commercial activity?
A26: We need further information on the business’s specific facts and circumstances to fully
determine if the sale of rental property would be subject to CAT. However, receipts from the
sale, exchange, or other disposition of an asset described in Section 1221 or Section 1231 of the
Internal Revenue Code (without regard to the length of time the person held the asset) are
excluded from commercial activity. Please see IRS Publication 544 for more details. Assuming
the rentals are 1231 property, they will not be subject to CAT upon disposition. [ORS
317A.100(1)(b)(B)]

Q27: Was the 2020 CAT tax return due April 15, 2020 or April 15, 2021?
A27: The 2020 CAT return is due April 15, 2021 unless the taxpayer requests the six-month
extension.

Q28: I have several clients that regularly file an extension to file because, as a sole
practitioner, I cannot complete all tax returns by April 15, 2020. Does OAR 150-317-1330
(1)(b)(A) mean that this situation does not qualify as good cause to request an extension to
file?
A28: Not having the information necessary to file CAT is good cause for requesting an
extension to file. However, reliance on a professional to merely prepare a return on time is not
considered good cause. See OAR 150-317-1330 for circumstances that qualify for good cause.
Keep in mind: The request for an extension of time to file must be made prior to April 15.

Q29: How will Oregon know if a registered company does not exceed the $1 million mark, if
they don’t file a return?

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A29: If the $1 million threshold is not met, the registered company doesn't have to file a return.
Revenue will do normal compliance checks to verify this information, as it does with other tax
programs.

Q30: If a service provider does not report cost of goods sold (COGS), what expenses are
considered cost inputs?
A30: Cost inputs is defined in statute as the cost of goods sold, as calculated in arriving at
federal taxable income under the Internal Revenue Code (IRC). Businesses that are not
required to report COGS for federal tax purposes may determine cost inputs in the same
manner as calculated under IRC Section 471 and applicable regulations.

Q31: Commercial activity means the fair market value of all amounts realized in the regular
course of trade or business, including debts forgiven. Is the Paycheck Protection Program
(PPP) forgiveness included in gross income for CAT?
A31: Commercial activity means the fair market value of all amounts—including debt
forgiven—realized in the regular course of the taxpayer’s trade or business. Generally, a
forgivable PPP loan (whether or not forgiven) received by a business from the CARES Act
federal relief program is not commercial activity and thus is not subject to the CAT. CAT
taxpayers are allowed to subtract 35 percent of the greater of their cost inputs or their labor
costs that are attributable to commercial activity. The amount of a PPP loan (forgiven or not)
used to pay labor costs or cost inputs incurred over the year can be included in the taxpayer's
costs eligible for the subtraction, so long as those costs are attributable to commercial activity.
We have information on the PPP loans and the CARES Act on the CAT webpage.

Q32: Can you confirm that income into an entity from a pass-through entity that pays CAT
will not also be subject to an additional CAT filing and payment?
A32: Distributive income received from a pass-through entity is excluded under ORS
317A.100(1)(b)(CC).

Q33: Many Oregon farmers have well over $1 million in total sales but send most of their
crop out of Oregon (either through direct sales, co-ops, or Oregon wholesalers) and thus
their Oregon commercial activity is below $750k. Do such farmers have any registration or
filing requirements for the CAT?
A33: The registration threshold is based on Oregon commercial activity. Taxpayers with
Oregon commercial activity below $750,000 have no responsibilities under the CAT, and they
are not required to register or file.

Q34: Are 1031 exchange residential rental units considered commercial activity?
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A34: Commercial activity is the total amount realized by a person, arising from transactions
and activity in the regular course of the person’s trade or business, without deduction for
expenses incurred by the trade or business. Commercial activity does not include receipts from
the sale, exchange, or other disposition of an asset described in IRC 1221 or 1231, without
regard to the length of time the person held the asset. If the residential rental units meet the
definition of property under IRC 1231, then a 1031 exchange would not be subject to CAT.

Q35: Do labor costs include S corporation shareholder's wages?
A35: Labor costs means total compensation of all employees, not to include compensation paid
to any single employee in excess of $500,000. An employee is any individual who performs
services for another individual or organization having the right to control the employee as to
the services to be performed or the manner in which they are performed. Typically, owners are
not considered employees, so their compensation would not qualify for the labor cost
subtraction.
However, there are situations under which an owner may be considered an employee.
Generally, if the owner is compensated through a federal Form W-2 and is subject to federal
taxes and withholding, then they qualify to be treated as an employee, and the compensation
received may be used for calculating the labor cost subtraction. Conceivably, a business owner
who is also an S corporation shareholder, could be considered an employee if they provide
services and act as an employee to the corporation.
The Commercial Activity Subtraction video on the CAT training materials webpage provides
information to assist taxpayers in determining their labor costs for purposes of CAT’s 35
percent subtraction. Detailed information is available in OAR 150-317-1220 (Employee
Compensation Labor Cost Subtraction).

Q36: Is there a summary on the website of the 40 commercial activity exclusions?
A36: The Revenue CAT webpage provides information on many of the major exclusions but
does not have a separate list of all 48 excluded items. For the most current and detailed list of
excluded items, refer directly to the 2020 laws. Revenue’s CAT webpage also includes a link to
the law.
Q37: Are difficulty-of-care payments and those not-taxable payments from DHS for foster
care subject to CAT?

A37: The statutes governing the CAT do not provide a specific exclusion for difficulty of care
payments or foster care payments excluded from gross income under Section 131 of the
Internal Revenue Code and IRS Notice 2014-7. The CAT is imposed on taxable commercial
activity (commercial activity, less the 35 percent subtraction for cost inputs or labor costs) over
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$1 million. Those with $1 million or less of taxable commercial activity will not have a CAT
liability.

Q38: Are grocery stores exempt from CAT?
A38: Grocery stores are not an excluded entity under the statutes governing the CAT.
However, the law does exclude receipts from the retail or wholesale sale of groceries. [ORS
317A.100(1)(b)(EE)].
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 consumption. Food-producing seeds and plants for
use in the purchaser’s garden are also groceries. Please note that the grocery exclusion does
not apply to certain items, such as alcoholic beverages, tobacco, cannabinoid edibles,
marijuana seeds, food that is hot at the point of sale, and hot food products ready for
immediate consumption. Taxpayers must include receipts from sales of these items in their
commercial activity.
A taxpayer may exclude receipts from the retail sale of groceries, provided that the sale meets
the following requirements:
Requirement 1: The sale is of a grocery item that would be eligible for purchase with SNAP
benefits, and
Requirement 2: The seller typically intends or expects that the sale of food to the purchaser is
for home consumption by the purchaser.
Safe Harbor: Stores that are qualified SNAP retailers, with a current permit from the U.S.
Department of Agriculture to accept SNAP benefits, have met requirement No. 2 and may
exclude receipts from the sales of SNAP-eligible food sold from the qualified retail store
(regardless of whether the groceries were purchased with SNAP benefits). Similarly, stores
that are not qualified SNAP retailers may still exclude receipts from the retail sales of grocery
items, provided that the items are intended for, or typically sold to, the final consumer for
home consumption. More information on this exclusion, including FAQs and a brief video, is
available on the DOR CAT webpage. More information is also available at OAR 150-317-1150
(Retail Sale of Groceries Exclusion).

Q39: Are restaurants exempt from CAT?
A39: No. The CAT provides an exclusion for receipts from the retail or wholesale sale of
groceries for home consumption. The statutes governing the CAT do not provide an exclusion
for restaurants. For purposes of the grocery exclusion, the term groceries is specifically defined
in statute. Essentially, groceries are food and beverages purchased for home consumption. Hot
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Oregon New Law Update

food products ready for immediate consumption, and food that is hot at the point of sale, are
not groceries as defined for CAT. Sales of meals and food products by restaurants, cafes,
delicatessens, coffee shops, and similar establishments are not considered retail sales of
groceries for home consumption. The exclusion does not apply to any food or food products
sold to consumers by a store or other establishment, if that establishment’s receipts from sales
of hot food are more than 80 percent of their total receipts from all sales of all food items
(receipts from both hot and cold food items).

Q40: Would take-out sales in a restaurant be exempt if delivered to a home?
A40: No. Sales of meals and food products by restaurants, cafes, delicatessens, coffee shops,
and similar establishments are not considered retail sales of groceries. The retail grocery
exclusion does not apply to any food or food products sold to consumers by a store or other
establishment if that establishment’s receipts from sales of hot food are more than 80 percent
of their total receipts from all sales of all food items (receipts from both hot and cold food
items).

Q41: If someone pays a bill where the vendor charges a CAT tax, how do we deduct that
(assuming it is deductible)? Do we just add to the invoice or show it as taxes?
A41: The laws governing the CAT impose the tax on the business, not the customer. The CAT
is an annual tax, not a tax on any particular transaction. The law establishing the CAT do not
prohibit a business from including an estimate of the CAT with other business expenses when
setting the total price charged to customers. However, the total price charged (including any
amount estimated to be attributable to the CAT) is included in the business’s commercial
activity and possibly subject to CAT. The statutes governing CAT do not provide any
deductions. There may be non-tax laws that regulate business pricing, advertising, or other
industry trade practices. Revenue does not advise about compliance with non-tax laws.

Q42: Are businesses that provide hospice care (not facility) and paid by Medicare and
Medicaid subject to this tax?
A42: Hospitals, long-term care facilities, and other entities subject to the health insurance
premium and managed care assessment or the hospital and long-term care facility assessment
are excluded from the CAT, unless they have unrelated business income. The net revenue of
residential care facilities as defined in ORS 443.400, and/or in-home care agencies as defined
in ORS 443.305, is excluded to the extent that the revenue is derived from or received as
compensation for providing services to a medical assistance or Medicare recipient.

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Q43: If you're only able to deduct 35 percent of your labor or 35 percent of cost of goods sold
against gross sales—it says taxable over $1 million, shouldn't that be gross instead of
taxable?
A43: The CAT applies only to taxable commercial activity over $1 million. Taxable commercial
activity means Oregon commercial activity, less the 35 percent subtraction. [ORS 317A.100(16)]
The tax does not apply to gross commercial activity.

Q44: My question is regarding slide 42—I wanted to know if it should be gross, instead of
taxable regarding the $1 million?
A44: As noted on slide 42 of the January 9, 2021 presentation, the CAT applies only to taxable
commercial activity over $1 million. Taxable commercial activity means Oregon commercial
activity, less the 35 percent subtraction. [ORS 317A.100(16)] The tax does not apply to gross
commercial activity.

Q45: Can vendors charge a separate line item on their invoices for the CAT tax?
A45: The laws establishing the CAT do not prohibit any business from recovering a business
expense when setting the total price for the sale, lease, or license of an item, or the sale of a
service. The CAT is imposed on the entity doing business in Oregon and is considered part of
the business's expenses. A business may include the CAT with other business expenses when
setting the total price charged to customers. However, the total price charged (including any
amount estimated to be attributable to the CAT) is included in the business’s commercial
activity and possibly subject to CAT.

Q46: How do you file if you qualify as an exempt organization such as a Medicare facility?
A46: Entities that are specifically excluded under CAT statutes, such as hospitals, long-term
care facilities, and other entities subject to the health insurance premium and managed care
assessment or the hospital and long-term care facility assessment, are not required to register
or file, unless the entity has unrelated business income in Oregon that would be considered
commercial activity subject to CAT. Further information on excluded entities is available on
DOR’s CAT FAQs, and in the CAT Overview video on the CAT training materials webpage.

Q47: What are cost inputs?
A47: Cost inputs are defined as cost of goods sold, as calculated in arriving at federal taxable
income under the Internal Revenue Code [ORS 317A.100(2)]. Taxpayers can refer to IRS
Publication 538, Accounting Periods and Methods, for more information.
For taxpayers engaged in farming operations doing business under NAICS code 111 (crop
production), 112 (animal production and aquaculture), or 115 (support activities for

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agriculture and forestry) who are not required to report cost of goods sold for federal tax
purposes, cost inputs means the taxpayer’s operating costs, excluding labor costs.
The Commercial Activity Subtraction video on the CAT training materials webpage provides
information to assist taxpayers in determining their cost inputs for purposes of CAT’s 35
percent subtraction. Farming operations may also refer to the Cost Inputs for Farming
Operations training video on the CAT training materials webpage, which provides specific
information for the agricultural sector.
Q48: Is there an exclusion for the sale of gasoline at a gas station?
A48: Yes. Receipts from the sale, transfer, exchange, or other disposition of motor vehicle fuel
or any other product used for the propulsion of motor vehicles is excluded from commercial
activity.

Q49: If you register for the CAT, do you have to file? Also, what if you file for 2020 but
don't exceed $1 million in 2021, do you have to cancel your registration?
A49: Any business—or unitary group of businesses—with Oregon commercial activity in
excess of $750,000, must register for the CAT. However, only those with Oregon commercial
activity in excess of $1 million must file a return, and only taxpayers with taxable Oregon
commercial activity in excess of $1 million will have a tax payment obligation. Taxpayers are
not required to cancel their registration if they do not meet the registration or filing thresholds
in future years. Further information on the registration and filing thresholds is available on
DOR’s CAT FAQs and in the CAT Overview video on the CAT training materials webpage.

Q50: What is the definition of labor costs for the CAT?
A50: The term labor costs is specifically defined in statute as the total compensation of all
employees, not to include compensation paid to any single employee in excess of $500,000.
[ORS 317A.100(12)] The term compensation means the amount received or to be received by
an employee, former employee, or the employee’s legal successor for services rendered to or
for an employer. This includes reimbursements received by or for an individual for medical or
education expenses, health insurance premiums, employee expenses, or on account of a
dependent care spending account, legal services plan, any cafeteria plan described in Section
125 of the Internal Revenue Code, or any similar employee reimbursement.
The Commercial Activity Subtraction video on the CAT training materials webpage provides
information to assist taxpayers in determining their labor costs for purposes of CAT’s 35
percent subtraction. Detailed information, as well as an example, is also available in OAR 150-
317-1220 (Employee Compensation Labor Cost Subtraction).

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Q51: CAT tax personal property sold out of the state but shipped or delivered out of the
state‒does this count as far as being subject to CAT tax?
A51: Receipts from the sale of tangible personal property are sourced to Oregon if the property
is delivered to a purchaser within Oregon, regardless of the f.o.b. point or other conditions of
sale, whether transported by seller, purchaser, or common carrier. Tangible personal property
sold and delivered to a purchaser outside of Oregon is not sourced to Oregon, and receipts
from that sale are not subject to the CAT. Detailed information and examples on sourcing sales
of tangible personal property is available in OAR 150-317-1030 (Sourcing Commercial Activity
from Sales of Tangible Personal Property) and in the CAT web video, Sourcing Sales of
Tangible Personal Property, on the training materials webpage.

Q52: If a business ships most of its products out of state, is income from those transactions
excluded from the corporate activity?
A52: The CAT applies to commercial activity sourced to Oregon. Receipts from the sale of
tangible personal property are sourced to Oregon if the property is delivered to a purchaser
within Oregon, regardless of the f.o.b. point or other conditions of sale, and whether
transported by seller, purchaser, or common carrier. Detailed information and examples on
sourcing sales of tangible personal property is available in OAR 150-317-1030 (Sourcing
Commercial Activity from Sales of Tangible Personal Property) and in the web video, Sourcing
Sales of Tangible Personal Property, on the training materials webpage.
Receipts from a sale of a service are sourced to Oregon, to the extent that the service is
delivered to a location in Oregon. Detailed guidance and instructions on sourcing receipts
from the sale of services, as well as the sale, rental, or lease of intangible property are available
in OAR 150-317-1040 (Sourcing Commercial Activity to Oregon of Other than Sales of Tangible
Personal Property) and in the web video, Sourcing for the Sales of Other Than Tangible
Personal Property, on the training materials webpage.
Receipts that are not sourced to Oregon are not subject to the CAT.

Q53: If inventory is sold to an out-of-state customer, does this count for the CAT tax?
A53: The CAT only applies to commercial activity receipts that are sourced to Oregon.
Receipts from the sale of tangible personal property are sourced to Oregon if the property is
delivered to a purchaser within Oregon, regardless of the f.o.b. point or other conditions of
sale, and whether transported by seller, purchaser, or common carrier. Receipts from sales that
are sourced outside of Oregon are not included in the taxpayer’s Oregon commercial activity
and are not subject to the CAT.

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Guidance and examples to assist taxpayers in sourcing sales of tangible personal property is
available in OAR 150-317-1030 (Sourcing Commercial Activity from Sales of Tangible Personal
Property) and in the web video, Sourcing Sales of Tangible Personal Property, on the training
materials webpage.
In addition, detailed guidance and examples for sourcing receipts from the sale of services, as
well as the sale, rental, or lease of real property and intangible property, is also available in
OAR 150-317-1040 (Sourcing Commercial Activity to Oregon of Other than Sales of Tangible
Personal Property) and in the web video, Sourcing for the Sales of Other Than Tangible
Personal Property, on the training materials webpage. Detailed guidance on sourcing receipts
for motor carrier transportation services and financial services is available in OAR 150-317-
10770 (Sourcing Motor Carrier Transportation Services) and 150-317-1050 (Sourcing of
Commercial Activity for Financial Institutions in This State).
Receipts that are not sourced to Oregon are not subject to the CAT.

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