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In other news: (5/15/2019)
A historic bill passed the Oregon Senate earlier this week which will place into effect a corporate activities tax on most businesses doing business in Oregon. The Oregon House had already passed House Bill 3427 which establishes what legislators have called a fund for student success. The goal of this legislation is to raise an additional $1 billion dollars each year to support K-12 education.
Earlier today, the Oregon Senate failed to pass a last-ditch motion to reconsider the bill so it now has a clear path to the desk of Governor Kate Brown who is expected to sign it into law.
Setting aside the political divisions and debates over the need for education funding, we want our Oregon business clients to be aware of this development and its implications. Most businesses with annual Oregon gross income in excess of $1 million will be subject to the corporate activities tax at a rate of 0.57% of gross income in excess of $1 million (regardless of net profitability). Businesses with less than $1 million annual gross income will be subject to a flat $250 annual tax. Exceptions are made for groceries, gasoline, healthcare services and certain other select items.
This corporate activity tax impacts C-Corporations, S-Corporations, partnerships, LLCs and sole proprietorships. It is slated to become effective for tax years beginning on or after January 1, 2020 and effected businesses will be expected to remit tax payments quarterly (within one month of the end of each quarter).
At the same time the bill raises taxes on business, it reduces the lowest three individual income tax brackets by 0.25%.
We continue to monitor the details of this legislation and will communicate more as the implications of this tax are better understood. Reach out to us with your questions by emailing email@example.com or calling (503) 665-0173.