OTA Dispatch Issue 1 2020

16 Oregon Trucking Associations, Inc. Oregon Truck Dispatch » 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 out of state. » Receipts from the wholesale or retail sale of groceries (but not nonfood items). » Intercompany receipts between members of a unitary group. » Amounts collected that are contractually obligated to be paid as sales commissions to a nonemployee of the business. » 15% of the amount received for labor by a subcontractor from a general contractor pursuant to a contract for residential real estate construction for single-family residential construction located in Oregon. ` Unitary groups shall register, file and pay the tax as a single taxpayer. » Unitary group means a group of persons and/or entities with more than 50% common ownership (direct or indirect) that are engaged in business activities that constitute a unitary business. » Unitary business means a business enterprise in which there exists directly or indirectly between the members or parts of the enterprise a sharing or exchange of value as demonstrated 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 demonstrating functional integration. • Unitary businesses may include a business enterprise the activities of which are in the same general line of business or constitute steps in a vertically integrated process. ` Nexus » Public Law 86-272 does not apply. » A person will have “substantial nexus” and be subject to the tax if any of the following apply: • The person owns or uses a part or all of its capital in this state. • The person is registered to do business in the state. • The person has bright-line nexus in the state (see below). • Any other situation that would create nexus under the U.S. Constitution. » Bright-line nexus exists if any of the following apply: • The person owns property with a value of at least $50,000 that is located in the State. Owned property is valued at original cost. Rented property is valued at eight times annual rental cost. • The person has payroll of at least $50,000. Payroll includes “any amount the person pays for services performed in this state on the person’s behalf by another.” • The person has commercial activity sourced to the state of at least $750,000. • The person has at least 25% of the person’s total property, payroll or commercial activity in Oregon. ` A taxpayer’s accounting method for the CAT tax shall be the same as for federal income tax. ` Commercial activity is sourced to Oregon as follows: » Sale, rental, lease or license of real property—If the property is located in Oregon. » Rental, lease or license of personal property—If the property is located in Oregon. » Sale of tangible personal property—If and to the extent the property is delivered to a purchaser in this state. » Sale of a service—If and to the extent the service is delivered to a location in this state. ` Any person or unitary group with commercial activity in excess of $750,000 in the tax year must register with the ODR or be subject to penalties. ` Every taxpayer with commercial activity of greater than $1 million for the year must file a CAT annual return no later than April 15. » The ODR can establish extension guidelines. » The tax itself is payable quarterly on or before the last day of January, April, July and October of each year for the previous quarter. » Underpayment penalties may be imposed if less than 80% of the balance due for any quarter is paid. » The tax is computed and reported on a calendar year basis, even for fiscal year taxpayers. ` Effective Date: January 1, 2020.  Kimberly seeks to develop robust relationships with her clients, advising them on their various issues. She operates from the mindset that if her clients succeed, she succeeds. Kimberly believes that hard work, no matter the challenges, is important, and she lives that philosophy each day when working for her clients. CAT, cont.