Or. Admin. Code § 150-317-1310

Current through Register Vol. 64, No. 1, January 1, 2025

Section 150-317-1310 - Estimated Tax Payments: Delinquent or Underestimated Payment or Both, Constitutes Underpayment

(1) An underpayment of Corporate Activity Tax (CAT) estimated tax exists when the payments received on or before a payment due date are less than the required installment due as determined under section (3) of this rule.

(2) If none of the exceptions, as provided in section (3) of this rule, are met, the department will assess a five percent penalty of the underpayment amount for any quarter for which an underpayment exists.

(3)Required installments and exceptions. Underpayment charges will not be imposed if:

(a) No estimated payments are required, as provided in OAR 150-317-1300;

(b) The taxpayer has paid an amount equal to at least the taxpayer's required installment for the corresponding quarter of the preceding tax year; or

(c) Each estimated tax installment is equal to or more than 25 percent (or the appropriate percentage of tax for short periods provided in OAR 150-317-1300) of any one of the following:

(A) For tax years beginning on or after January 1, 2020 and ending before January 1, 2022, 80 percent of the tax for the tax year.

(B) For tax years beginning on or after January 1, 2022, 90 percent of the tax for the tax year.

(C) For tax years beginning on or after January 1, 2020 and ending before January 1, 2022, an amount equal to 80 percent of the tax computed on annualized taxable commercial activity. For purposes of this computation, tax credits available on the date of the payment may be deducted from the annualized tax. An estimated or anticipated tax credit may not be used. Annualized taxable commercial activity is computed by entering the taxable commercial activity on an annualized basis:

(i) For the first three months of the taxable year, in the case of the installment required to be paid in the fourth month;

(ii) For the first six months of the taxable year, in the case of the installment required to be paid in the seventh month;

(iii) For the first nine months of the taxable year, in the case of the installment required to be paid in the tenth month; and

(iv) For the 12 months of the taxable year, in the case of the installment required to be paid in the first month of the following taxable year.

(D) An amount equal to 100 percent of the amount obtained by applying Section 6655(e)(3)(C) of the Internal Revenue Code to Oregon taxable commercial activity for any person with seasonal commercial activity.

(E) For tax years beginning on or after January 1, 2022, an amount equal to 90 percent of the tax computed on annualized taxable commercial activity. For purposes of this computation, tax credits available on the date of the payment may be deducted from the annualized tax. An estimated or anticipated tax credit may not be used. Annualized taxable commercial activity is computed by entering the taxable commercial activity on an annualized basis:

(i) For the first three months of the taxable year, in the case of the installment required to be paid in the fourth month;

(ii) For the first six months of the taxable year, in the case of the installment required to be paid in the seventh month;

(iii) For the first nine months of the taxable year, in the case of the installment required to be paid in the tenth month; and

(iv) For the 12 months of the taxable year, in the case of the installment required to be paid in the first month of the following taxable year.

(F) For tax years beginning on or after January 1, 2021, 100 percent of the tax shown on the return for the preceding tax year (after credits), provided that the preceding tax year was a period of twelve months and an Oregon return showing a liability was filed for such tax year. When applying this subsection to a current taxable year of less than 12 months, the tax for the preceding tax year is reduced by multiplying it by the number of months in the short tax year and dividing the resulting amount by 12.

(4)Unitary group returns. If a unitary group CAT return is filed, any underpayment shall be computed on a combined basis. In computing the underpayment on a combined basis, the tax and facts shown on the returns for the preceding year must be aggregated, regardless of whether combined or separate returns were filed.

(5) If separate returns are filed and estimated tax is paid on a combined basis, the payments and prior year's tax may be divided between the various persons' liabilities in any manner designated by the taxpayers.

(6) Underpayment penalties shall be assessed on the last return filed and received before the due date, including extensions, for such return. That return shall be considered the "original return," and the tax due shall be used as the basis for computing the underpayment charges.

(7) Once underpayment charges are assessed on the original return, an amended return reducing the tax liability will not reduce the underpayment charges.

Or. Admin. Code § 150-317-1310

REV 15-2019, temporary adopt filed 12/30/2019, effective 01/01/2020 through 06/28/2020; REV 11-2020, adopt filed 06/24/2020, effective 6/28/2020; REV 26-2020, amend filed 12/23/2020, effective 1/1/2021

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.143

Statutes/Other Implemented: ORS 317A.137, 317A.149, 317A.161 & Oregon Laws 2020 (1st special session), Chapter 2, Sections 9, 10, and 11