(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.
