- The four Oregon CAT thresholds
- How the Oregon CAT is calculated
- Who's subject to the CAT and who isn't
- The 30-day registration rule and its penalty
- Oregon CAT due dates, extensions and estimates
- Oregon CAT penalties
- Can you pass the CAT on to customers?
- My verdict on the Oregon CAT
- Frequently asked questions
Oregon's Corporate Activity Tax (CAT) is $250 plus 0.57% of taxable Oregon commercial activity above $1 million, as of October 2026. You must register within 30 days of reaching $750,000 of Oregon commercial activity in a year, but you only owe tax once taxable activity passes $1 million.
The CAT confuses people because it isn't a sales tax and it isn't an income tax. The Oregon Department of Revenue describes it as a tax for the privilege of doing business in Oregon, measured on commercial activity: the total amount a business realizes from transactions and activity in Oregon. It sits on top of the state's corporate income tax and applies to tax years beginning on or after January 1, 2020.
The four Oregon CAT thresholds
The Department of Revenue sets four thresholds, based on Oregon commercial activity over the year, as of October 2026:
| Threshold | Amount | What it means |
|---|---|---|
| Excluded | $750,000 or less | No CAT requirements at all |
| Registration | $750,000 | You must register for the CAT |
| Filing | More than $1 million | You must file a return |
| Tax payment | More than $1 million of taxable activity | You file and pay tax |
The gap between registering and paying is the part people miss. A business can be required to register, and even to file, without owing a cent, because tax is only due on taxable activity above $1 million.
How the Oregon CAT is calculated
The formula comes from ORS 317A.125: $250 plus 0.57% of taxable Oregon commercial activity above $1 million, as of October 2026. Two things shrink the base before that rate applies:
- Exclusions. Certain items are left out of the definition of commercial activity, so they're never taxed.
- The 35% subtraction. Under ORS 317A.119, you can subtract 35% of the greater of your cost inputs or your labor costs from commercial activity sourced to Oregon.
Cost inputs mean cost of goods sold, as calculated for federal taxable income. Farming operations that don't report cost of goods sold use operating costs excluding labor. You can't take the subtraction on transactions between members of a unitary group.
Who's subject to the CAT and who isn't
Any person, business or unitary group doing business in Oregon may have CAT obligations. That includes C and S corporations, partnerships, sole proprietorships and other entities. The law excludes some entities unless they have unrelated business taxable income under federal law, including:
- Nonprofits recognized by the IRS as 501(c)(3) organizations.
- Farmers' cooperatives exempt from federal income tax.
- Federal, state and local government entities.
The 30-day registration rule and its penalty
A business must register within 30 days of realizing $750,000 in commercial activity for the year. Failing to register can bring a penalty of $100 per month, up to $1,000 per calendar year, under ORS 317A.131, as of October 2026. The good news is that you register once: re-registration in later years isn't required.
Oregon CAT due dates, extensions and estimates
- The annual return is due the 15th day of the fourth month after the end of the tax year.
- For tax years beginning on or after January 1, 2024, a seven-month extension to file is available.
- If you expect $5,000 or more of CAT liability, you must make quarterly estimated payments. They're due on or before the last day of the fourth, seventh and 10th months of the tax year, and the last day of the first month after the year ends.
- If a due date falls on a weekend or holiday, it moves to the next business day.
An extension gives you time to file, not time to pay. Interest runs from the day after the original due date until you pay in full, even with a valid extension.
Oregon CAT penalties
| Penalty | Rate |
|---|---|
| Quarterly underpayment | 5% |
| Late payment, even with an extension | 5% |
| Late filing, return filed more than three months late | 20% |
| Not paid and not filed within 30 days of a demand notice | 25% of the deficiency |
| No returns for three consecutive years | 100% |
The total penalty can't be more than 100% of the tax due.
Employers in the state should also read the Oregon break laws guide.
Can you pass the CAT on to customers?
The law doesn't stop a business including an estimate of the CAT in its prices, alongside its other expenses. But the CAT is imposed on the business, not the customer, and the whole price you charge, including any amount you added for the CAT, still counts as commercial activity. So adding it to prices can slightly raise the base it's measured on.
If you're still setting up the company, read the Oregon LLC guide.
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My verdict on the Oregon CAT
Watch the $750,000 line, not the $1 million one. That's when the 30-day registration clock starts and the monthly penalty becomes possible, as of October 2026. Track your Oregon activity from the first month of the year so the trigger never surprises you. Hiring there as well? Check the Oregon minimum wage, and if you also trade in Texas, compare the CAT with the Texas franchise tax, another tax measured on business activity rather than profit.
Frequently asked questions
What is the Oregon CAT rate?
The CAT is $250 plus 0.57% of taxable Oregon commercial activity above $1 million, as of October 2026.
When must I register for the Oregon CAT?
Within 30 days of realizing $750,000 in Oregon commercial activity for the year. You don't need to re-register in later years.
Do I owe Oregon CAT if I'm registered?
Not necessarily. Only businesses with more than $1 million of taxable Oregon commercial activity have a payment obligation.
What is the 35% subtraction in the Oregon CAT?
You can subtract 35% of the greater of your cost inputs or labor costs from commercial activity sourced to Oregon.
When is the Oregon CAT return due?
On the 15th day of the fourth month after the end of the tax year, with a seven-month extension to file available for tax years from 2024.
Are Oregon CAT estimated payments required?
Yes, if you expect $5,000 or more of CAT liability for the year.
Is the Oregon CAT a sales tax?
No. The Department of Revenue says it isn't a transactional tax like a retail sales tax, and it isn't an income tax. It's an annual tax on the business, measured on commercial activity.
What is the deadline for an Oregon CAT refund claim?
A refund claim must generally be filed within 3 years of the return due date, excluding extensions, or two years after payment, whichever is later.
What is the penalty for not registering for the Oregon CAT?
Up to $100 per month, with a maximum of $1,000 per calendar year, as of October 2026.
