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The Oregon Department of Revenue has released guidance that says certain federal assistance to businesses under the Coronavirus Aid, Relief, and Economic Security (CARES) Act is not commercial activity under Oregon statute and will not be subject to the Oregon Corporate Activity Tax.
The exempt assistance includes forgiven Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loan (EIDL) advances, and Small Business Administration (SBA) loan subsidies.
The guidance is supported by the below FAQ issued May 6, 2020:
“Q: Are forgivable PPP Loans, emergency advances, and SBA payments to or on behalf of small businesses under the CARES Act subject to CAT?
A: The Coronavirus Aid, Relief, and Economic Security (CARES) Act recently passed by Congress provides federal assistance to small businesses, including forgivable Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loan (EIDL) emergency advances, and Small Business Administration (SBA) debt relief for certain business loans. Generally, an EIDL emergency advance, SBA debt relief payment, or forgivable PPP loan (whether or not forgiven) received by a business from these federal relief programs is not commercial activity and thus is not subject to the Corporate Activity Tax.”