Oregon’s New Commercial Activity Tax Law Could Affect Manufacturers

By: Ashley Klaus

In May 2019, Governor Kate Brown signed into law HB 3427A (the Commercial Activity Tax) after the bill successfully moved through the House and the Senate.

The bill will impose an annual tax, beginning in 2020, on all commercial activity — regardless of the business entity type. This tax is in addition to income taxes, including minimum taxes, which are already imposed by the state of Oregon.

The law defines “commercial activity” as any transaction or activity in the regular course of a trade or businesses — including bringing any property into the state. Manufacturers, in particular, may see substantial changes in their tax planning processes, as inventory is included in the state’s definition of “property.” This is a massive change for Oregon, so now is the time to be thinking about the potential tax impact on your business, and what information you may need to start gathering to minimize your state tax burden.

Ashley Klaus, a Senior Manager at Geffen Mesher and an expert on State & Local Taxes (SALT), has thoroughly researched the details and implications of the new tax law. She has also hosted numerous seminars for Geffen Mesher’s clients, in which she discussed the new Commercial Activity Tax and fielded questions from the audience.

Ashley recently recorded a thought leadership podcast with the Portland Business Journal. She spoke at length about topics related to SALT, including this new Commercial Activity Tax. While the podcast was recorded before the law was enacted, her information is still incredibly helpful and relevant. Listen to the full podcast below:

If you have any questions whatsoever about State & Local tax, the new Commercial Activity Tax, or any other tax matter, please reach out to Gina Kaveny, our Director of Business Development.