Oregon CAT: DOR to Hold Public Hearings in October 2020 and November 2020 on Draft Rules

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Schwabe, Williamson & Wyatt PC

On September 25, 2020, we attended a virtual meeting with the Oregon Department of Revenue (“DOR”). During that meeting, the DOR stated that it plans to hold two public hearings on 10 CAT rules before the end of the year.

On October 27, 2020, the DOR will hold the first of the two public hearings. The first hearing is with respect to the eight CAT rules listed below. The embedded links are to our previous discussions of those rules. Please note, however, the bolded rules will be amended in the coming weeks.  

  • OAR 150-314-0248 (Refund Offset Priority);
  • OAR 150-317-1025 (Corporate Activity Tax: Unitary Groups with Non-U.S. Members – Reporting Requirements);
  • OAR 150-317-1070 (Sourcing of Motor Carrier Transportation);
  • OAR 150-317-1170 (Farming Operations: Clarifying Definitions for Agricultural Commodities, Farming Operations, Out of State Sales Based on Industry Averages);
  • OAR 150-317-1200 (Cost Input or Labor Cost Subtraction);
  • OAR 150-317-1300 (Estimated Tax: When Estimated Payments Are Required);
  • OAR 150-317-1400 (Determining Property Resold Out-of-State, and Methods of Determining); and
  • OAR 150-317-1500 (No Penalty for Good Faith Effort).

Regarding OAR 150-314-0248, we obtained a draft of the rule. In short, the rule clarifies when refunds may be offset to assessed CAT accounts. It provides the DOR will offset a refund to assessed accounts as long as the taxpayer does not have a currently pending appeal of the assessment. It also allows the DOR to offset a refund to nonassessed accounts when the taxpayer sends the DOR a written authorization to offset the refund. Lastly, the draft rule specifies that a taxpayer’s refund will be offset only to accounts owed by that taxpayer, and an individual refund will not be offset to a corporate account nor will a corporate refund offset accounts of a subsidiary.

In November 2020, the DOR will hold the second public hearing to discuss two other CAT rules. The embedded link is to our previous discussion of the rule. Please note, however, the bolded rule will be amended in the coming weeks.

  • OAR 150-317-1310 (Estimated Tax Payments: Delinquent or Underestimated Payment or Both, Constitutes Underpayment); and
  • OAR 150-317-1420 (Damages Received as a Result of Litigation).

Regarding OAR 150-317-1420, we have yet to see a draft of this rule. Dan Eller participated in a small workgroup with other practitioners and the DOR regarding this concept. Dan contributed that the rule could follow an “origin of the claim” or something similar. The DOR received other comments.

We anticipate an official announcement on these public hearings in the future, as well as an announcement on the anticipated amendments, the issuance of draft rule OAR 150-317-1420, and a disaster relief proclamation similar to the one issued by the IRS last week

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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