Oregon Selective Tax Protest — Corporate Activity Tax (CAT), Vehicle Privilege/Use Tax, and Statewide Transit Tax

OREGON SELECTIVE TAX PROTEST — CAT / VEHICLE / TRANSIT (NO GENERAL SALES TAX)

TABLE OF CONTENTS

1. No Sales Tax Notice and Stage Selection
2. Section A — Corporate Activity Tax (CAT) Protest
3. Section B — Vehicle Privilege / Use Tax Protest
4. Section C — Statewide Transit Tax Protest
5. Section D — Oregon Tax Court Complaint (Magistrate Division)
6. Section E — Verification and Signature
7. Section F — Certificate of Service
8. Oregon Practice Notes
9. Sources and References

1. NO SALES TAX NOTICE AND STAGE SELECTION

NOTICE. Oregon does not impose a general state sales or use tax. ORS Chapter 320 imposes only a narrow set of selective excise taxes (motor vehicle privilege/use, statewide transit, lodging, heavy-equipment rental, bicycle excise, and aircraft / amusement device taxes), and ORS Chapter 317A imposes the Corporate Activity Tax. South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), is therefore inapplicable to Oregon's general retail sales-tax regime (because none exists), although factor-presence and economic-nexus principles remain relevant to the CAT and Oregon's corporate excise tax.

2. SECTION A — CORPORATE ACTIVITY TAX (CAT) PROTEST

[DATE]

Oregon Department of Revenue
Attn: CAT Conference Officer
955 Center Street NE
Salem, OR 97301-2555

Re: Written Objection to CAT Notice of Deficiency

2.1 Timeliness

This written objection is filed within thirty (30) days of the Notice of Deficiency, as required by ORS 305.265(5), made applicable to the CAT by ORS 317A.149.

2.2 Statutory Framework

The Corporate Activity Tax under ORS 317A.116 is imposed on persons with "taxable commercial activity" sourced to Oregon. The tax is computed under ORS 317A.125 as $250 plus 0.57% of taxable commercial activity in excess of $1,000,000. Registration is required at $750,000 of Oregon commercial activity. ORS 317A.131. A 35% subtraction for cost inputs or labor costs is permitted under ORS 317A.119.

2.3 Common CAT Disputes (Select All Applicable)

• ☐ Threshold dispute. Oregon commercial activity does not exceed the $1,000,000 filing threshold (ORS 317A.125).
• ☐ Exclusion dispute. Receipts qualify as excluded under ORS 317A.100(1)(b) (e.g., receipts from sale of motor fuel; groceries; agricultural sales of producer; resale exemption for vehicle dealers).
• ☐ Sourcing dispute. Receipts are not "sourced to Oregon" under ORS 317A.131 / OAR 150-317-1040.
• ☐ Subtraction dispute. 35% subtraction under ORS 317A.119 was wrongly disallowed or capped.
• ☐ Unitary-group dispute. Improper inclusion/exclusion of affiliated entity from unitary group under ORS 317A.106.
• ☐ Penalty/interest dispute. Reasonable-cause penalty waiver under ORS 305.145; underestimate penalty under ORS 314.525 / ORS 317A.137.
• ☐ Constitutional challenge. Commerce Clause / Due Process / Uniformity Clause (Or. Const. Art. I, § 32; Art. IX, § 1).

2.4 Statement of Facts

[Insert chronological factual narrative — operations, Oregon nexus, revenue streams, sourcing methodology, and any prior agreements with the Department.]

2.5 Legal Argument

[Insert position-by-position legal argument with citations to ORS 317A, OAR Ch. 150 sub-chapter 317, Tax Court precedent, and federal/multistate authorities to the extent persuasive.]

2.6 Penalty Abatement

Taxpayer requests abatement of all penalties pursuant to ORS 305.145 (interest waiver — Department error) and ORS 314.402(4) (substantial understatement — reasonable cause and good faith), as applied to CAT by ORS 317A.149.

2.7 Conference Request

Taxpayer requests a conference under ORS 305.265(5)(b): ☐ in person ☐ telephonic ☐ video ☐ written only. Certified-mail delivery of the Conference Decision is requested under ORS 305.265(5).

2.8 Reservation of Rights

Taxpayer reserves all rights under ORS 305.860 to 305.900 and the right to appeal any Notice of Assessment or Conference Decision to the Oregon Tax Court within ninety (90) days under ORS 305.280 and 305.560.

3. SECTION B — VEHICLE PRIVILEGE / USE TAX PROTEST

3.1 Statutory Framework

ORS 320.405 imposes a 0.5% privilege tax on Oregon vehicle dealers for the privilege of engaging in retail sales of "taxable motor vehicles" (generally new vehicles with 7,500 miles or fewer at retail; see ORS 320.400). ORS 320.410 imposes a complementary 0.5% use tax on the purchaser of a taxable motor vehicle purchased at retail outside Oregon and stored, used, or consumed in Oregon. Procedural rules in ORS Chapters 305 and 314 apply by virtue of ORS 320.420.

3.2 Common Vehicle-Tax Disputes (Select All Applicable)

• ☐ "Taxable motor vehicle" definition. Vehicle exceeds 7,500-mile threshold or otherwise falls outside ORS 320.400(7).
• ☐ Resale / dealer-to-dealer exclusion. Transaction is wholesale, not retail.
• ☐ Off-highway / heavy-equipment exclusion. Vehicle is not a "motor vehicle" subject to ORS 320.405.
• ☐ Use-tax credit. Credit for sales/use tax paid to another state under ORS 320.410(3).
• ☐ Nonresident exemption. Sale to a nonresident with delivery outside Oregon (factually disputed).
• ☐ Lemon law / rescission credit. Refund of tax following statutory rescission.
• ☐ Penalty / interest abatement.

3.3 Statement of Facts

[Insert factual narrative with VIN-by-VIN analysis where applicable, including delivery location, mileage at retail, and customer residency.]

3.4 Legal Argument

[Insert legal argument citing ORS 320.400–.435, OAR 150-320-0410 et seq., and any relevant DOR guidance.]

3.5 Conference Request and Reservation of Rights

Taxpayer requests a conference under ORS 305.265(5) and reserves all rights under the Oregon Taxpayer Bill of Rights (ORS 305.860 et seq.) and to appeal to the Oregon Tax Court.

4. SECTION C — STATEWIDE TRANSIT TAX PROTEST

4.1 Statutory Framework

ORS 320.550 imposes the Statewide Transit Tax — a one-tenth of one percent (0.1%, or 0.001) tax on (a) wages of Oregon residents (regardless of where work is performed) and (b) wages of nonresidents performing services in Oregon. Employers withhold and remit; self-employed Oregon residents pay on net earnings. The tax is administered under ORS Chapter 305 and 314 procedures by virtue of ORS 320.555. Revenues fund the Statewide Transportation Improvement Fund.

4.2 Common Transit-Tax Disputes (Select All Applicable)

• ☐ Residency / situs dispute. Employee was a nonresident performing all work outside Oregon.
• ☐ Wage definition. Payments were not "wages" under ORS 316.162 (e.g., independent-contractor payments).
• ☐ Statutory exemption. Federal employees of certain agencies; tribal employees; ministers; etc.
• ☐ Calculation / rate dispute. Improper application of rate or quarter.
• ☐ Late filing / late payment penalty. Reasonable-cause abatement under ORS 305.145 / OAR 150-320-0530.
• ☐ Successor-liability dispute. Acquirer not liable for predecessor's transit-tax obligations.

4.3 Statement of Facts

[Insert factual narrative — employer operations, employee residency / work-location data, payroll records, and prior reporting history.]

4.4 Legal Argument

[Insert legal argument citing ORS 320.550–.560, OAR 150-320-0500 et seq., and DOR transit-tax guidance.]

5. SECTION D — OREGON TAX COURT COMPLAINT (MAGISTRATE DIVISION)

IN THE OREGON TAX COURT

MAGISTRATE DIVISION — [CAT / EXCISE / WITHHOLDING]

Case No.: [ASSIGNED BY COURT]****

COMPLAINT (CORPORATE ACTIVITY TAX / VEHICLE PRIVILEGE-USE TAX / STATEWIDE TRANSIT TAX)

Plaintiff Taxpayer alleges:

5.1 Parties, Jurisdiction, and Venue

5.1.1. Plaintiff [TAXPAYER NAME] is [an Oregon corporation / a foreign LLC registered to do business in Oregon / an individual residing in [COUNTY] County] with [principal place of business / residence] at [ADDRESS].

5.1.2. Defendant Oregon Department of Revenue (the "Department") administers the [CAT under ORS Chapter 317A / Vehicle Privilege and Use Taxes under ORS 320.400–.435 / Statewide Transit Tax under ORS 320.550].

5.1.3. The Oregon Tax Court has exclusive jurisdiction under ORS 305.410 and Or. Const. Art. VII (Amended), § 1. The Magistrate Division has initial jurisdiction under ORS 305.501.

5.1.4. This Complaint is filed within ninety (90) days of the appealed determination as required by ORS 305.280 and 305.560.

5.2 Procedural History

5.2.1. On [__/__/____], the Department issued a [Notice of Deficiency / Notice of Assessment / Conference Decision / Refund Denial] with respect to the [CAT / Vehicle Privilege Tax / Vehicle Use Tax / Statewide Transit Tax] for the period [YYYY] – [YYYY] (the "Notice"). A copy is attached as Exhibit 1.

5.2.2. [If applicable] Plaintiff timely filed a written objection on [__/__/____] under ORS 305.265(5). The Department issued its Conference Decision on [__/__/____].

5.3 Issues Presented

1. [Issue].
2. [Issue].
3. [Issue].

5.4 Statement of Facts

[Numbered factual narrative.]

5.5 Legal Argument

[Substantive analysis with citations.]

5.6 Prayer for Relief

WHEREFORE, Plaintiff respectfully prays that this Court:

• A. Cancel or reduce the disputed assessment;
• B. Order refund of $[____] plus statutory interest under ORS 305.220;
• C. Abate all penalties and interest associated with the disputed positions;
• D. Stay collection during the pendency of this appeal under ORS 305.565;
• E. Award costs, disbursements, and attorney fees to the extent permitted by ORS 305.490 and ORS 20.105; and
• F. Grant such other relief as is just and equitable.

6. SECTION E — VERIFICATION AND SIGNATURE

STATE OF OREGON

COUNTY OF [COUNTY]

I, [NAME, TITLE], declare under the penalties of perjury that I have read the foregoing [Written Objection / Complaint] and that the facts stated therein are true and correct to the best of my knowledge, information, and belief, formed after reasonable inquiry, and that I am authorized to verify this pleading on behalf of the Plaintiff Taxpayer.

Date: [__/__/____]

[________________________________]

[NAME, TITLE]

Respectfully submitted,

[________________________________]

[ATTORNEY NAME], Oregon State Bar No. [####]
Counsel for Plaintiff Taxpayer
[FIRM NAME]
[STREET ADDRESS]
[CITY, STATE ZIP]
Telephone: [NUMBER]
Email: [EMAIL]

7. SECTION F — CERTIFICATE OF SERVICE

I certify that on [__/__/____], I served a true and correct copy of the foregoing on:

[________________________________]

[ATTORNEY NAME]

8. OREGON PRACTICE NOTES

• No general sales tax — confirm scope. Oregon imposes no general retail sales or use tax. Practitioners must affirmatively confirm which selective excise tax actually applies before drafting; do not import sales-tax concepts (resale certificates, exemption certificates, Wayfair economic-nexus thresholds) by analogy without statutory grounding.
• CAT is a gross-receipts tax, not income tax. The CAT applies to "commercial activity" rather than profit. Even loss-making businesses owe CAT if Oregon commercial activity exceeds $1 million. Apportionment / sourcing under ORS 317A.131 is the most heavily litigated area; counsel should engage early with the Department's CAT unit and consider Director-level rulings under ORS 305.099.
• CAT registration vs. filing. Registration is required at $750,000; return filing is required at $1,000,000 of Oregon commercial activity. Failure to register carries a $100/month penalty (capped at $1,000 per year) under ORS 317A.161.
• Vehicle privilege/use tax narrowness. ORS 320.400 limits "taxable motor vehicle" to vehicles with 7,500 miles or fewer at retail (with exceptions). Resale/wholesale and most heavy-equipment transactions fall outside the tax. Many disputes turn on the mileage-at-retail finding.
• Statewide Transit Tax — recent legislative volatility. HB 3991 (2025 special session) sought to double the rate to 0.2% effective 1/1/2026; that bill was referred to voters and the Department paused implementation, holding the rate at 0.1%. Verify current status before computing liability.
• Procedural integration. All three taxes use the standard Chapter 305/314 protest framework: 30-day Notice-of-Deficiency objection (ORS 305.265), Notice of Assessment, 90-day Tax Court appeal (ORS 305.280, 305.560), 60-day Regular Division appeal (ORS 305.501), and direct review by the Oregon Supreme Court (ORS 305.445).
• Burden of proof. Taxpayer carries burden by preponderance. ORS 305.427.
• Confidentiality. Returns and audit information are confidential under ORS 314.835. CAT-specific confidentiality is addressed via ORS 317A.149's incorporation of Chapter 314.
• Constitutional defenses. For CAT and transit tax, consider Commerce Clause, Due Process, and Or. Const. Art. IX, § 1 (uniformity); for vehicle privilege tax, consider Or. Const. Art. IX, § 3a (motor-vehicle revenue restricted to highway uses).
• Local sales taxes. Although Oregon has no state sales tax, Ashland imposes a 5% prepared-food tax and several localities impose lodging taxes; these are administered locally and follow separate ordinances rather than ORS 305 procedures.

9. SOURCES AND REFERENCES

• ORS Chapter 317A (Corporate Activity Tax) — https://www.oregonlegislature.gov/bills_laws/ors/ors317A.html
• ORS 317A.125 (CAT rate) — https://oregon.public.law/statutes/ors_317a.125
• ORS 317A.137 (CAT returns) — https://oregon.public.law/statutes/ors_317a.137
• ORS 317A.149 (incorporation of Chs. 305 and 314) — https://oregon.public.law/statutes/ors_317a.149
• Oregon DOR — Corporate Activity Tax (CAT) — https://www.oregon.gov/dor/programs/businesses/pages/corporate-activity-tax.aspx
• ORS Chapter 320 (Miscellaneous Taxes) — https://www.oregonlegislature.gov/bills_laws/ors/ors320.html
• ORS 320.405 (Vehicle Privilege Tax) — https://oregon.public.law/statutes/ors_320.405
• ORS 320.410 (Vehicle Use Tax) — https://oregon.public.law/statutes/ors_320.410
• Oregon DOR — Vehicle Privilege and Use Taxes — https://www.oregon.gov/dor/programs/businesses/pages/vehicle-privilege-and-use-taxes.aspx
• ORS 320.550 (Statewide Transit Tax) — https://oregon.public.law/statutes/ors_320.550
• Oregon DOR — Statewide Transit Tax — https://www.oregon.gov/dor/programs/businesses/pages/statewide-transit-tax.aspx
• ORS Chapter 305 (Administration; Appeals) — https://www.oregonlegislature.gov/bills_laws/ors/ors305.html
• ORS 305.265 (Notice of deficiency) — https://oregon.public.law/statutes/ors_305.265
• ORS 305.560 (Tax Court complaint) — https://oregon.public.law/statutes/ors_305.560
• Oregon Tax Court — https://www.courts.oregon.gov/courts/tax/
• Tax Court Rules — Magistrate Division (TCR-MD) — https://www.courts.oregon.gov/rules/Documents/TAX-MagistrateRulesJan2022AndOut-of-Cycle.pdf
• OAR Chapter 150 (DOR rules) — https://secure.sos.state.or.us/oard/displayChapterRules.action?selectedChapter=84

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Oregon does not impose a general state sales or use tax. An attorney licensed in Oregon must review and customize this document before use. Statutes, rates, and procedures change frequently — verify all citations and rate calculations before filing.