Oregon Tax Consultants Practice Exam 2026 – Complete Study Resource

The primary goal of Oregon's corporate activity tax (CAT) is to tax businesses based on their gross receipts. This approach means that the tax is calculated on the total revenue generated by a business, without deducting expenses or costs. The intention behind this structure is to ensure a steady revenue stream for the state, as it allows for taxation even when a business is not profitable.

This method contrasts with a profit-based tax system, where only the net income is subject to taxation, potentially resulting in fluctuating revenues based on business profitability. By focusing on gross receipts, the CAT aims to create a more stable and predictable funding source for essential state services, including education, health services, and infrastructure.

While funding for public schools is one of the beneficial outcomes of the CAT, the primary function of the tax itself is centered around gross receipts rather than net profits or serving as a replacement for personal income tax.