Big Stories: November, 2019   
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  Oregon Business Journal
  P.O. Box 93
  Salem, OR 97308

Full November 2019 Issue * Salem Weather * Past Issues * About Us * Ad Rates * Contact Us


Preparing for the New Corporate Activities Tax
A brand-new tax on companies doing business in Oregon kicks in on January 1


.... but if you're looking for guidance from the Oregon Department of Revenue (DOR) about how much you might owe next year, you'll have to wait a few more months.
    The so-called Corporate Activities Tax (CAT) is a consumption-based, business entity-level gross receipts tax, passed by the Oregon Legislature during the 2019 legislative session. It raises more than $1 billion in revenue annually to be directed toward new K-12 education spending. Contrary to what the name implies, all business entities, regardless of business structure, are subject to the new tax. That means C corps, S corps, partnerships, LLC's, and sole proprietorships all must register, file, and/or pay the CAT, so long as they are not exempt.
    The tax is $250 + 0.57% of a company's Oregon sales in excess of $1 million if those sales constitute "commercial activity," a defined term in the legislation with many exclusions.
    Businesses with $750,000 in commercial activity must register with DOR, even if they have no tax liability. Those businesses with $750,000 or less in commercial activity are exempt. The legislation also includes a 35% subtraction against commercial activity - the greater of cost inputs or labor costs. Businesses with $1 million or more in Oregon commercial activity must still file a return, even if the 35% subtraction results in no tax owed.
    Sounds confusing? It is. And with less than six months from the end of the legislative session to the time that the CAT takes effect, DOR has had precious little time to start creating rules for administering this massive new tax. Over the past two months, DOR held a series of town hall meetings across the state to seek input from business taxpayers and tax preparers about the administrative rules for the CAT.
    Here's what we know at this point: DOR will be releasing temporary rules in three phases. A first round focused on the most high-profile issues surrounding the CAT will come out January 1. Likewise, a second and third round will come out for medium and lower priority issues on February 1 and March 1, respectively. The permanent rulemaking process will then commence, with opportunities for public comment.
    Some of the expected administrative rules will be fairly straightforward. Will businesses be taxed on their sales to out-of-state customers? No, out-of-state sales fall outside the definition of Oregon commercial activity and are thus exempt. Will out-of-state companies have to pay the tax on their sales into Oregon? Yes, if they have $1 million or more in commercial activity in Oregon, they will have to pay, even if they've never had to pay taxes in Oregon before. Does the CAT replace Oregon corporate income tax? No, the CAT is in addition to any other taxes owed by a corporation. That means that C corporations will continue to pay an income tax on their profits, but they will also have to pay the CAT if they have $1 million or more in commercial activity.
    What are some of the most common types of sales that are exempt from the definition of commercial activity? This is where things get complicated again, because DOR will likely have to define many of the following terms in their rules. Notable exemptions include transportation fuel sales, wholesale and retail sales of groceries, interest (except interest on credit sales or service charges), compensation to employees, gifts or charitable contributions received, and 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.
    How will DOR define an agent? Will businesses be able to add the CAT to their invoices or receipts, passing the increase on to their customers? How will DOR deal with agricultural cooperatives? These questions all need answers, in addition to countless others. Have a question or comment for DOR? You can email them at
    Will DOR be able to provide Oregon businesses with enough guidance to start planning for what they might owe in time? That would be a herculean task to get right on the first try, especially given the short timeframe.
    One thing is certain though. Estimated quarterly payments will be due starting April 30, 2020.

Anthony K. Smith is Oregon state director for NFIB

Being Thankful Improves the Workplace
Focusing on the good things in our lives
helps refocus us in a positive way.
Being grateful is associated with greater happiness.


    Goodbye summer. It's time for autumn which means Thanksgiving is right around the corner. As we near the Thanksgiving season; food, family, and a spirit of thankfulness fill our heads like the falling leaves fill the air.
    Thankfulness is one way to improve everyone's experience at work, so why only practice it once a year? The overwhelming amount of cases of anxiety and depression populate the news.
    Suicide rates are up. The holidays only seem to contribute to this with pressure to spend money and with the stress of facing family issues at social events.
    Recent studies show whatever we focus on in life grows. Focusing on the good things in our lives, even if it is just the ability to breathe, walk, have a job, or have a house helps refocus us in a positive way. Being grateful is associated with greater happiness. What are tangible ways to express gratitude that directly can affect our work?
  • 1. At the end of each workday write down a few things that happened for which you are thankful.
  • 2. Write and personally deliver a letter of thanks to someone who was particularly kind or helpful to you that week.
  • 3. Say thank you to your co-workers, employers and employees. Research has shown this makes people more motivated to work harder.
  • 4. Take time at work for "gratitude sessions." Before a big project, job or challenge, tell people why a project means so much to your business. Thank them for taking it on.
  • 5. Meditate or think kindly of people. Research shows this can inform your behavior in the future.
    By the way, thank you to Salem Business Journal and Bruce Taylor for allowing me to write a monthly column for over 10 years.

Mary Louise VanNatta, APR, CAE is the CEO of VanNatta Public Relations, a PR, event planning and consulting firm in Salem, Oregon.

What to Know as a Young Pro
Better to overdress, than underdress


    So, you are a new college graduate, an established young pro, or on the hunt for your first "big" job. For most, you are transitioning from an organized, structured school program to an unpredictable, chaotic world outside of academics.
    This change can be shocking. The job search is difficult and often results in repeated rejection (kind of like my dating life).
    Unfortunately, a number of college graduates give up on their dreams after a few months of failing and find themselves in dead-end jobs.
    Don't let this happen. Eventually, you will land the job you want and forget all the angst and self-doubt.
    This column will feature advice for current and future young professionals as they navigate and identify the best fit in their careers.
    MONTHLY TIP: Better to overdress,than underdress I learned this one the hard way. There's nothing like showing up to a suit-and-tie event in jeans and a sweater (#regret). Don't be like me.
    This doesn't mean you need to dress formally every day; simply dress appropriately. Most offices have a business casual dress code that you should generally stick to. Slacks, dress shoes, and a nice button-up work great for men and women.
    Avoid blue jeans, sweaters, shorts, t-shirts, sneakers or branded material. Even if you have a casual Friday, don't take it too far.
    People will judge you by what you wear. You do not want to remembered for the wrong reasons.
    In addition, young professionals sometimes have issues determining what's appropriate to wear and what's not. Avoid outfits that show a lot of skin or hug the body too tightly.
    A professional office is not the place to take risks with your outfits. If you want to go out dancing or to the gym, you should probably change outfits after work. Don't be that person dressing inappropriately at the office; it's embarrassing for everyone and can lead to awkward conversations. Keep it classy.

Keenan Emery works at VanNatta Public Relations, a PR, Event Planning and Strategic Communications firm located in Salem, Oregon., Keenan@PRSalem.