Hello and Happy New Year, Opsahl Dawson is excited for the upcoming Tax Season. We wanted you to be aware of some new state and local changes. Washington B&O Tax Increase Effective January 1, 2020 a Workforce Education Investment Surcharge will be imposed on select businesses in the service and other activities B&O tax classification. The new surcharge is equal to .3%, .5%, or 1.0% of gross receipts. This is in addition to the pre-existing 1.5% rate. For more information on WA B&O visit the DOR website https://dor.wa.gov/find-taxes-rates/business-occupation-tax/workforce-education-surcharge/workforce-education-investment-surcharge Washington Department of Revenue Annual Excise Return Due Date Change 2019 Annual Excise Filing is now due April 15th, 2020. In prior years the due date was January 31st. Washington Real Estate Excise Tax (REET) Graduated Rate Washington imposes the real estate excise tax on the transfer of Washington real property. Prior to 2020 the flat rate was 1.28%. Effective January 1, 2020 the State of Washington established a graduated REET. The state portion of the tax will be imposed as follows:
1.1% of selling price below $500,000
1.28% of selling price between $500,000 and $1,500,000
2.75% of selling price between $1,500,000 and $3,000,000; and
3.0% of selling price over $3,000,000
The local rates will be in addition to the rates above. For more information on the REET application and exemptions: https://dor.wa.gov/find-taxes-rates/other-taxes/real-estate-excise-tax Oregon Corporate Activity Tax The new Corporate Activity Tax (CAT) is imposed on businesses for the privilege of doing business in the state, and applicable to tax years beginning January 1, 2020. The CAT is measured on commercial activity in Oregon. CAT applies to all business entity types, such as C and S corporations, partnerships, sole proprietorships, and other entities. There are certain items excluded from the definition of commercial activity and will not be subject to CAT. In addition, Oregon’s CAT allows for a 35% subtraction for certain business expenses. The CAT is applied to Oregon taxable commercial activity in excess of $1 million. The tax is computed as $250 plus .57% of Oregon commercial activity of more than $1 million. Only taxpayers with more than $1 million of taxable Oregon commercial activity will have a payment obligation. Here is a link to the frequently asked questions for more information: https://www.oregon.gov/DOR/programs/businesses/Pages/corporate-activity-tax.aspx Here are a few things to be aware of:
Registration is Open – Taxpayers must register within 30 days of reaching $750,000 in Oregon Revenues
Clients will register here: https://revenueonline.dor.oregon.gov/tap/_/#1
Opsahl Dawson will not complete registration for clients
Tax is due on 2020 Revenue and will be required to have estimated tax payments paid in 4/30/2020, 7/31/2020, 10/31/2020, and 1/31/2021
The first tax form will be filed by 4/15/2021
There are potential penalties for not registering, paying estimates, or filing on time
City of Portland Residential Rental Registration (RRR) Fee The City of Portland has implemented a new rule that requires all owners of residential rental property within the city to register the address of each rental. The new Schedule R must be filed each year. Starting for tax year 2019 there will be a $60 per unit registration fee. This fee will be due with the 2019 filing on 4/15/2020. Here is a link to the City of Portland website where you can read more about the requirements: https://www.portlandoregon.gov/revenue/78312 Please let us know if you have questions on what impacts these have on your specific situation. Sincerely, AARON DAWSON CPA // SHAREHOLDER // OPSAHL DAWSON
7701 NE Greenwood Dr., Suite 200 Vancouver, WA 98662 360.737.8007 959 11th Ave. Suite A Longview, WA 98632 360.425.2000