The Coronavirus Aid, Relief, and Economic Security (CARES) Act recently passed by Congress provides federal assistance to small businesses, including forgivable Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loan (EIDL) emergency advances, and Small Business Administration (SBA) debt relief for certain business loans. Generally, an EIDL emergency advance, SBA debt relief payment, or forgivable PPP loan (whether or not forgiven) received by a business from these federal relief programs is not commercial activity and thus is not subject to the Corporate Activity Tax.
Oregon DOR: CARES Act Business Loans Not Subject to CAT
SUMMARY BY TAX ANALYSTS
The Oregon Department of Revenue clarified that business loans from COVID-19 federal relief programs created by the Coronavirus Aid, Relief, and Economic Security Act are not corporate activity, and are therefore not subject to the corporate activity tax.