Senate committee hears testimony on bills to raise corporate activity tax thresholds

SALEM, Ore. — The Senate Committee on Finance and Revenue opened public hearings March 3 on measures that would raise exemptions in Oregon's corporate activity tax, known as the CAT, drawing competing testimony from business groups and education and labor advocates.

Senate Bill 381 and Senate Bill 490 would change the CAT filing requirement and taxability threshold from more than $1,000,000 in commercial activity to more than $5,000,000. Senate Bill 440 would raise the filing and tax thresholds for amounts received from home-building contracts to more than $10,000,000. The committee took public testimony but did not vote on any bill.

The measures matter because CAT revenue largely funds the Student Success Act, the statute enacted in 2019 that directs CAT proceeds to K-12 and early-childhood investments. Supporters said raising the thresholds would relieve many smaller businesses while preserving most CAT revenue; opponents said the bills would shrink the revenue stream for schools and other services unless offsets are identified.

Sponsor remarks and proponents

Senator Suzanne Weber, who identified herself as representing District 16, told the committee that SB 381 "makes a very, very modest adjustment." Weber said the bill would exempt the first $5,000,000 of gross sales rather than $1,000,000 and left most of the Student Success Act revenue intact while offering "a lifeline to many Oregonian businesses."

Business groups and small employers argued…