State Taxation of Gross Receipts: Texas Franchise, Oregon CAT, Ohio CAT, Nevada Commerce, Washington B&O and Other Local GR Taxes

A live 110-minute CPE webinar with interactive Q&A


Thursday, November 18, 2021

1:00pm-2:50pm EST, 10:00am-11:50am PST

or call 1-800-926-7926

This course will address how to manage the increasingly popular gross receipts taxes (GRTs) charged by states. The panel will cover Oregon's recently enacted corporate activity tax (CAT), Texas' franchise tax amendments, Ohio's CAT, along with other states as well as a few local gross receipts taxing regimes. The speakers will discuss which businesses are subject to these taxes, what constitutes nexus in these states, and how to lessen the tax burden of GRTs on businesses.

Description

Called by many different names--CAT, franchise tax, margins tax, commerce tax, etc.--a GRT is still a tax on receipts. It's a tax that can be charged multiple times on the same product and businesses operating at a loss. As a result, this is an ideal tax for states needing to raise revenue and is being embraced by more and more states and localities. Minimizing the impact of GRTs is an increasingly important concern for businesses and SALT professionals.

Oregon recently joined the group of states with a GRT called a CAT. The tax applies to "persons" that have substantial nexus in Oregon. Nexus includes, but is not limited to, receipts of $750,000 or more, property valued at $50,000 or more, or payroll of $50,000 or more. This CAT is assessed on receipts of $1 million and above, after a 35 percent deduction for certain costs, and is calculated as $250 plus .57 percent of "calculated taxable commercial activity." These gross receipts calculations are subject to unitary reporting rules.

One of the better-known GRTs is Texas' franchise tax. In January 2021, Texas adopted expansive changes to its apportionment and sourcing rules for gross receipts effective retroactively. Texas allows deductions for certain expenses, including the cost of goods sold, and has credits available to mitigate the tax.

With more states charging GRTs, additional planning opportunities exist to minimize the impact of GRTs in these states. Categorizing a business correctly is the first and most important item to consider to ensure assuming it meets nexus criteria. Some states require business registration and minimum fees, even when the business is below the GRT threshold for taxation (Texas for one). Noncompliance can be costly.

Listen as our panel of SALT experts explains the new Oregon CAT and who is required to file, recent Texas franchise tax changes, Nevada's commerce tax, and strategies to minimize taxation in other states that raise revenue by taxing gross receipts.

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Outline

  1. Taxation of gross receipts
    1. Overview
    2. Trends
    3. Nexus
  2. Oregon CAT
  3. Texas' amendments to its franchise tax rules
  4. Nevada
  5. Ohio
  6. Other states
  7. Best practices to minimize taxes

Benefits

The panel will review these and other important issues:

  • Who is subject to Oregon's new CAT?
  • What businesses are subject to Texas franchise tax after the recent amendments?
  • How should companies subject to Texas franchise tax under the updated rules handle its retroactive application?
  • What constitutes nexus in states that tax gross receipts?
  • What steps can be taken to minimize tax liability in GRT states?

Faculty

Roberts, Stacey
Stacey L. Roberts, CPA

State and Local Tax Director
TaxOps

Ms. Roberts has been making SALT less taxing for thousands of businesses over the last 25 years. As a director of the...  |  Read More

Vorndran, Judith
Judith B. Vorndran, JD, CPA, MSBA

Partner
TaxOps

Ms. Vorndran helps clients and tax professionals navigate the morass of state and local tax issues with the goal of...  |  Read More

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