By Taxpayers Association of Oregon
The House Committee on Revenue will be holding a hearing today on HB 2433 the Corporate Activities tax (Cat) and on raising the exemption bottom limit from one million to five million. The CAT Tax has been extremely injurious to businesses as it taxes revenue and not profit — which means it taxes businesses even when they are not making actual profits (like in a recession). It is designed that way so politicians get their tax revenue even when times are at the worst. The CAT tax soaked many businesses during the pandemic as they saw their profits sink but still draw revenue. HB 2433 would exempt more small businesses near the bottom threshold.
HB 2433 officially summary is that it Increases the amount of commercial activity exempt from the Corporate Activity Tax, and the threshold for filing a tax return from $1 million to $5 million. Applies to tax years beginning on or after January 1, 2024. Takes effect on the 91st day after adjournment sine die.
Background on CAT Tax: “Businesses are required to register with the Department of Revenue if their commercial activity in a year exceeds $750,000 and are required to file a Corporate Activity Tax return if their commercial activity exceeds $1 million. If a business has commercial activity over $1 million, it owes a flat $250 tax plus tax at the 0.57% tax rate for taxable commercial activity over $1 million. This bill would increase the threshold for both filing and taxation to $5 million.”
Taxpayers Association of Oregon encourages a YES vote on this very harmful tax.
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