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February 19, 2021

Oregon Department of Revenue confirms applicability of Corporate Activity Tax to insurers

In Temporary Administrative Order Rev-3-2021 (released January 27, 2021), the Oregon Department of Revenue (Department) adopts Temporary Or. Admin. Regulation 150-317-1060 (Temporary Regulation), which provides guidance on the definition and sourcing of insurance premium receipts and the applicability of the Corporate Activity Tax (CAT) to insurers.

The Temporary Regulation, effective February 1, 2021 through July 30, 2021, explicitly states that the CAT applies to insurers, including insurers that have already paid excise and retaliatory taxes in-state.


By statute, any person or unitary group with Oregon commercial activity exceeding $750,000 must register for CAT purposes with the Department within 30 days of exceeding that threshold amount.1"Commercial activity" for an insurer is defined as "all gross direct life insurance premiums, gross direct accident and health insurance premiums, and gross direct property and casualty insurance premiums" reported on the statement of premiums in the annual statement. It also includes "the gross amount of surplus lines premiums received on Oregon home state risks" as shown on the monthly reports filed with the Director of the Oregon Department of Consumer and Business Services.2

An "insurer" is defined as "any domestic, foreign or alien insurer … and any interinsurance and reciprocal exchange and its attorney in fact … However, 'insurer' does not include title insurers or health care service contractors … "3

The CAT applies to persons that have substantial nexus with Oregon. Substantial nexus includes:

  • "Bright-line" presence, which consists of having one or more of the following in Oregon during the calendar year: (1) $50,000 in property; (2) $50,000 in payroll; (3) $750,000 in commercial activity; or (4) at least 25% of the person's total property, total payroll or total commercial activity
  • Other nexus with the state, to the extent that the person can be required to remit the CAT under the US Constitution4

Clarification of "in lieu" exemption

Retaliatory taxes or the corporate excise tax generally apply to foreign and alien insurers writing premiums in Oregon. These taxes apply in lieu of: state taxes upon premiums; taxes upon income; franchise or other taxes measured by income that might otherwise be imposed upon the foreign or alien insurer (except the fire insurance premiums tax); taxes imposed upon wet marine and transportation insurers; and assessments imposed on insurers.5

Before the release of the Temporary Regulation, some questioned whether the "in lieu" exemption in the statute applied to the CAT; if so, insurers that already paid a tax on premiums written in-state would be exempt from the CAT due to the possibility of double taxation on those premiums, which would arguably violate the statute. The Temporary Regulation explicitly answers this question by stating unequivocally that the "in lieu" exemption does not apply to the CAT.6

The Temporary Regulation also clarifies how insurers should source "commercial activity" to Oregon. The "insurance premiums" subject to the CAT are the Oregon premiums written as shown on the insurer's Schedule T attached to its National Association of Insurance Commissioners' Annual Statement.7

Further information

Click here for additional information on the CAT from the Department, including its responses to frequently asked questions and draft/temporary rules.


Insurers, particularly those not organized in Oregon, should consider the application of the Temporary Regulation to their business in Oregon and whether they are subject to the CAT based on the level of Oregon premiums written in the state.

EY will continue to monitor developments regarding the CAT and issue additional Tax Alerts as warranted.


Contact Information
For additional information concerning this Alert, please contact:
State and Local Taxation Group
   • Timothy Mahon (
   • Gary Holcomb (
   • Becca Smith (


1 ORS 317A.131 (registration).

2 ORS 317A.100(1)(a)(C).

3 ORS 317A.100(10) referencing the general definition of "insurer" used for purposes of the Oregon CAT (see ORS 317.010(11) (defining "insurer").

4> See generally ORS 317A.116 (nexus).

5 ORS 731.840(1).

6 Or. Admin. Reg. 150-317-1060(2) ("The [CAT] described in ORS 317A.100(1)(a)(C) applies to insurers that meet that definition under ORS 317A.100(10) and that receive the insurance premiums described in section (1) of this administrative rule; the provisions in ORS 731.840 do not apply to the [CAT].")

7 Or. Admin. Reg. 150-317-1060(1) ("For purposes of determining an insurer's commercial activity subject to the [CAT], 'insurance premiums' includes the following premiums received by an insurer, unless otherwise excluded under ORS 317A.100:

  1. "All gross direct life, accident and health, and property and casualty insurance premiums written, as reported on the statement of premiums accompanying the annual statement required to be filed with the Director of the Department of Consumer and Business Services under ORS 731.574 that allocate premiums by jurisdiction.
  2. The gross amount of surplus lines insurance premiums written on Oregon home state risks, as shown in the report required by ORS 735.465."