Or. Admin. R. 150-317-1015

Current through Register Vol. 63, No. 6, June 1, 2024

Section 150-317-1015 - Short Tax Period Return Requirements

(1) "Short tax period" means a period of less than 12 months that begins on the first day after the close of the former taxable year and ends on the day before the day designated as the first day of the new taxable year.

(2) If a change in accounting period requested by the taxpayer is approved by the Internal Revenue Service for federal purposes, the change shall also be permitted for Oregon corporate activity tax purposes. A taxpayer shall thereafter make returns and compute commercial activity upon the basis of the new accounting period.

(3) If a unitary group appoints a new designated entity for filing corporate activity tax returns and that designated entity uses a different tax year than what was previously used by the unitary group's designated entity, the unitary group must file a short tax period return.

(4) A short tax period return shall be filed on or before April 15 of the calendar year following the calendar year in which the short tax period ends.

(5) Taxpayers who must file a return for a short tax period shall prorate, for the number of days in the short period tax return as defined under section (1) of this rule, the $750,000 commercial activity registration threshold under ORS 317A.131, the $1 million tax rate threshold under ORS 317A.125, and the $1 million return filing threshold in ORS 317A.137. The proration percentage shall be calculated to the nearest fourth decimal point.

(6) The corporate activity tax subtraction shall be based on the expenses allowed per ORS 317A.119 that are associated with the commercial activity reported in the short tax period.

(a)Labor Costs. Taxpayers shall prorate, for the number of days in the short period tax return as defined under section (1) of this rule, the $500,000 cap on employee compensation to a single employee in determining their eligible labor costs.

(b)Cost Inputs. Taxpayers shall determine their cost inputs based on the method used for determining their cost of goods sold as calculated in arriving at federal taxable income under the Internal Revenue Code.

Example. A taxpayer files a return for a period of June 1 through March 31, a period of 304 days or 83 percent of a full year (304/365=0.8329) and during that time incurs eligible cost inputs of $200,000 and eligible labor costs of $175,000. The taxpayer calculates the registration threshold as $750,000*83.29%, or $624,675. The taxpayer calculates the tax rate and return filing thresholds as $1,000,000*83.29%, or $832,900. The taxpayer calculates their CAT subtraction by taking the greater of their cost inputs or labor costs (in this case, their eligible cost inputs) multiplied by 35 percent: $200,000*35% or $70,000.

(7)Due dates of payments for short tax period returns. If a CAT taxpayer expects to have a tax liability of $5,000 or more and is required to file a return for a short tax period, estimated tax payments are due as follows:

(a) If the period covered is less than three months, only one payment is required. It is equal to 100 percent of the estimated tax and is payable on the due date of the return.

(b) If the period covered is three months or longer but less than six months, two payments are required. One-half of the estimated tax is due on the last day of the fourth month, and the balance, if any, is due on or before the due date of the tax return, not including extensions.

(c) If the period covered is six months or longer but less than nine months, three payments are required. One-third of the estimated tax is due on the last day of the fourth month, one-third on the last day of the seventh month and the balance, if any, is due on or before the due date of the tax return, not including extensions.

(d) If the period covered is nine months or longer, but less than twelve months, four payments are required. One-fourth of the estimated tax is due on the last day of the fourth month, one-fourth on the last day of the seventh month, one-fourth on the last day of the tenth month, and the balance, if any, on or before the due date of the tax return, not including extensions.

Or. Admin. R. 150-317-1015

REV 15-2021, adopt filed 12/15/2021, effective 1/1/2022

Publications: Contact the Oregon Department of Revenue for information about how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360(2) and ORS 183.355(1)(b).

Statutory/Other Authority: ORS 305.100, 317A.103, 317A.143 & Oregon Laws 2021, chapter 572, section 2

Statutes/Other Implemented: ORS 317A.103 & Oregon Laws 2021, chapter 572, section 2