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DEPARTMENT OF REVENUE
DIVISION 307
PROPERTY SUBJECT TO TAXATION
150-307.010(1)
Real Property
(1) For purposes of ad valorem taxation, the determination of real and personal property is controlled by the statutory definitions of real property, whether or not they conform to definitions used for other purposes.
(2) Real property includes:
(a) Land. "Land" may be either the raw undeveloped land, or improved to the extent a site is created. A "site" exists when land has been improved by site developments to the point that it is, or is ready to be, used for the purpose intended.
(A) Site developments are improvements to the land that become so intertwined with the land as to become inseparable. Examples are: fill, grading and leveling, utility facilities (sewer, water, etc.), cost of developer's activities and profit that accrues to the land, including but not limited to: permits, advertising, sales commissions, developer's profit and overhead, insurance coverage, and any other improvements to the land necessary to improve it to become a site. Site developments are synonymous with site improvements, land improvements, and site preparation. Site developments consist of both "offsite developments" and "onsite developments."
(i) Offsite developments are land improvements provided to the site. These include but are not limited to items such as streets, curbs, sidewalks, street lighting, storm drains, and utility services such as electricity, water, gas, sewer and telephone lines.
(ii) Onsite developments (OSD) are land improvements within the site which support the buildings or other property uses. These include but are not limited to items such as grading, fill, drainage, wells, water supply systems, septic systems, utility connections, extension of utilities to any structure(s), retaining walls, landscaping, graveled driveway area.
Onsite development is synonymous with onsite improvement.
(B) For all specially assessed farm and forest land appraisals the value of onsite developments included as part of the land value will be listed as a separate item on the land record. An exception to this procedure is the appraisal of taxable improvements on exempt federal land. In this situation, the onsite development value shall be carried as a separate item on the improvement record.
(C) The value of site development may be higher or lower than the total cost of its components and is determined by the contribution of the site developments to the market value of the site.
(b) Buildings, structures, improvements, machinery and equipment. These are improvements on the land and are real property when erected upon or affixed to the land.
(A) Erected Upon. "Erected upon" means assembled, built or constructed and permanently situated on real property and adapted to use in place. For example, a large piece of machinery or equipment is set upon a foundation without being fastened thereto, but is integrated with the building by the use of special foundations, special wiring, electrical panels and switches, plumbing, venting, access ramps, openings and other forms of construction.
(B) Affixed To. "Affixed to" means being annexed or attached to the real property by bolts, screws, nails or by being built into the structure. Also, items may be constructively affixed to the land or building and considered real property by virtue of their weight or size. Some examples include but are not limited to: pipeline milking equipment, milk bulk tanks, seed cleaning equipment, bowling alley lanes, pin setters, and scoring equipment, rock crushing plants, foundries, smelters, paper machines, newspaper presses, sawmills, plywood machinery and presses, aluminum reduction machinery and cannery equipment.
(C) When machinery, equipment or fixtures are affixed to or erected upon real property and owned separately from real property, they are assessable as real property to the owner as provided in ORS 308.115(2).
Stat. Auth: ORS 305.100
Stats. Implemented: ORS 307.010
Hist.: 1-54; 3-58; 11-59; 1-66; 3-70; 11-71; RD 16-1987, f. 12-10-87, cert. ef. 12-31-87; RD 8-1992, f. 12-29-92, cert. ef. 12-31-92; RD 6-1993, f. 12-30-93, cert. ef. 12-31-93
150-307.020
Personal Property Definitions
(1) Goodwill. "Goodwill" is a saleable business asset based on reputation, not physical assets.
(2) Customer list. "Customer list" is a proprietary list containing information regarding a business enterprises's clients and is part of the business records for that business.
(3) Contracts and contract rights. "Contracts and contract rights" refers to agreements between two or more parties, which establish mutual rights and responsibilities for a stated consideration, and rights created under such agreements. Examples of contracts include but are not limited to:
(a) Contracts for sale of goods;
(b) Covenants not to compete;
(c) Contracts for purchase of supplies;
(d) Contracts to rent or lease property;
(e) Contracts to provide financing;
(f) Contracts for services by employees or others;
(g) Contracts for permission to use property or processes.
When appraising property utilizing the income approach, the rent attributable to the property shall be based on market rent. "Market rent" is the rental income that the property would most probably command in the open market as of the assessment date. Market rent shall be used for both owner occupied and rented or leased property regardless of the terms of any particular rental or lease agreement encumbering the property.
(4) Trade secret. "Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique or process that derives independent economic value from not being generally known by other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.020
Hist.: RD 6-1994, f. 12-15-94, cert. ef. 12-30-94
150-307.020(3)
Personal Property
Property classified as personal property is: (This list is not exclusive.)
(1) Boats and vessels includes all floatable craft. See also ORS 308.260.
(2) Merchandise and stock in trade, commonly referred to as inventories, include the following categories:
(a) Merchandise includes all classes of commodities which are obtained in a salable condition and held for sale in the ordinary course of business.
(b) Materials consist of goods purchased for use in manufacturing and upon which further work is necessary before they are available for disposal. Such goods may be raw materials or they may be partially fabricated commodities secured from others. Thus, things which are finished stock or merchandise for one establishment may be raw materials for another. However, when parts are manufactured and held for future use in manufacturing, they may be classed as finished parts but included in raw materials inventory.
(c) Supplies fall within two categories:
(A) Inventory Supplies consist of personal property owned by or in possession of the taxpayer, that are expended in the production of finished goods or will be consumed in the sale of the stock in trade of the taxpayer held for sale in the ordinary course of his business.
(B) Noninventory Supplies include those items which are not to be expended in the production of finished goods or not to be sold to customers.
(d) Work in process applies to all goods to which manufacturing services have been applied and on which further operation will be necessary before the product is normally ready for disposition. The value of work in process includes material and any labor and factory service (overhead) which have been exerted in bringing the work to the present state of completion.
(e) Finished stock consists of completed products which are available for disposal, comparable to a dealer's merchandise. See ORS 308.250 -- Processor's Exemptions, and ORS 311.211 -- Omitted Property Statutes.
(3) Livestock consisting of all domesticated or confined animals, birds, bees, fish and reptiles.
(4) Movable machinery, movable tools and movable equipment include items readily movable as opposed to apparently stationary or fixed items. See Paragraph 2b of OAR 150-307.010(1).
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.020
Hist.: 1-54; 3-58; 11-59; 12-61; 12-65; 1-66; 12-66; 3-70; RD 8-1992, f. 12-29-92, cert. ef. 12-31-92
150-307.080
Taxation of Property Associated with Mining Claims on Federal Land
(1) A mining claim filed with the United States Bureau of Land Management (BLM) conveys a right of possession and right to extract minerals under conditions set forth by those agencies. BLM issues an identification number to recognize unpatented mining claims.
(2) An unpatented mining claim allows the claimant limited use of land owned by the United States government.
(a) The unpatented mining claim including the land and minerals is exempt from property tax as required by ORS 307.080. Land includes site developments that are so intertwined as to be inseparable from the land as defined in OAR 150-307.010(1) and roads as described in ORS 308.236.
(b) All rights and interests associated with an unpatented mining claim, including but not limited to the right to possess, use, or access the land, are exempt from property tax.
(c) Improvements, machinery and buildings on an unpatented mining claim are subject to property tax.
(d) Annual filing fees, maintenance payment fees, maintenance payment fee waiver certification (small miner's waiver), a notice of intent to hold, or assessment work notices (proof of labor) are also exempt from property tax unless such labor or fees increase the real market value of taxable improvements to the property.
(3) A patented mining claim issued by the United States government confers ownership, rights, privileges, immunities and appurtenances to the claimant. A patented mining claim is subject to property tax as described in ORS 308.115.
(4) Taxable personal property must be reported to the assessor in the county in which the property is located each year. This requirement is further described in ORS 307.190, 308.105, 308.210, 308.250, 308.285 and 308.290.
(a) Except as otherwise specifically provided, all taxable personal property must be reported for taxation in the county where it is located (situs) as of 1:00 am on the first day of January each year.
Example 1: A taxpayer resides in County A and has a mining claim in County B. The mining equipment is kept at taxpayer's residence when not in use on the claim during the winter months. It is located in the taxpayer's garage on January 1st at 1:00 am. The taxpayer must report the mining equipment in County A.
(b) The assessor will provide a Confidential Personal Property Return for purposes of reporting taxable personal property. The return is due in the office of the assessor by March 1 each year.
(c) Personal property may be assessed in the name of the owner or of any person having possession or control of the property.
(d) The assessor must cancel the personal property assessment for any taxpayer whose taxable personal property in the county has a total assessed value (AV) below a threshold value. The Department of Revenue re-computes the threshold value annually under ORS 308.250(4). Canceling the assessed tax in one year does not relieve the taxpayer from the annual filing requirement for any other tax year.
Example 2: A taxpayer garages movable machinery used on a mining claim at her residence in County A but leaves tools and small equipment in a shed at the mining claim located in County B. The value of taxable personal property in County A on January 1 is $12,000 and the value of taxable personal property in County B is $1,600. The taxpayer must report the personal property in both County A and County B. The Department calculated the threshold value at $13,000 for this assessment year. The assessor in each county will cancel the tax owing for the year since the value of the property in the assessor's respective county is under the threshold value.
(e) Pursuant to ORS 307.190(1), personal property mining equipment owned or held by an individual solely for personal use, benefit, and enjoyment is exempt from taxation.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.080
Hist.: REV 9-2006, f. 12-27-06, cert. ef. 1-1-07
150-307.110(1)
Public Property Leased or Rented by Taxable Owner
(1) Qualifying Conditions. The assessor shall assess and tax publicly owned real or personal property for the assessed or specially assessed value thereof uniformly with real property of nonexempt ownerships when the following conditions of a lease or other interest or estate less than fee simple are met. A lease or other possessory interest exists if the occupant is granted exclusive possession of a definitely described area for a specified period of time (term).
(2) Exclusive Possession. The test is whether the occupant has sufficient control over the premises to warrant the label of possession. If the occupant can exclude others, including the owner (except for inspection, making repairs etc.) the occupant has possession. But, if the premises must be shared with others, such as a common pasture, the occupant does not have a possessory interest. When the property can be used for many purposes such as farming, recreational, residential, or mining, the right to use it for a single limited purpose might not constitute possession; yet, the same right to use may well be regarded as possessory if the property in question is used for a limited number of purposes. If the property in question is of little use for anything other than mining or recreation, the grant of the right to use it for one of these purposes embraces a substantial part of all of the practical uses to which the land may be put. Therefore, although such use is limited, it could be considered "exclusive."
(a) Revocation. A possessory interest may exist even though the agreement provides that it may be revoked upon notice, for cause or upon the happening of some event. If the use may be terminated, without notice or cause, it may be a mere non-possessory license which is ordinarily revocable at will and without notice.
(b) "Management" or "Concession" agreements present special problems. For example, a county and a private corporation agree that the corporation will operate a county owned golf course for the county. Even though the agreement requires the corporation to meet many standards as to services, pricing, personnel etc., the corporation may still have a possessory interest if it has the exclusive right to occupy and operate the facilities without interference from the county and retains the major part of the proceeds. However, if the county is actively involved in the operation and allows the corporation a minor portion of the proceeds as compensation for its services, the corporation may be considered a mere agent or employee of the county.
(c) Parking Lots and Similar Arrangements. If the right is merely a "hunting license" to park in any available space, it is non-possessory. However, if a specific space is assigned, the interest may be possessory if the other conditions are met.
(3) Area. The occupant must have possession of an area that is definitely described or capable of being described.
(4) Term. A possessory interest may be for any period of time the parties agree upon.
(5) Rent. A lease is a contract and requires some sort of consideration in terms of money, goods, services, or other benefits.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.110
Hist.: RD 16-1987, f. 12-10-87, cert. ef. 12-31-87; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; RD 6-1994, f. 12-15-94, cert. ef. 12-30-94; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98
150-307.112
Property Held Under Lease
(1) A new claim shall be filed with the county assessor, as required under ORS 307.112(4), when a new lease, new lease-purchase agreement, extension of current lease, extension of current lease-purchase agreement or any modification to the existing lease or lease-purchase agreement is made.
(2) The new claim shall meet all the requirements of ORS 307.112.
(3) Late filing as provided in ORS 307.162(2) is permitted.
(4) The State of Oregon and the United States government are not permitted to file a claim for exemption under ORS 307.112.
(5) The assessor must be satisfied that the amount of rent charged is below market rent. "Market rent" is defined as the rental income a property would most probably command in the open market and includes an element for property taxes.
(6) To reflect the savings below market rent, the actual rent must be less than market rent in an amount that is at least equal to what the property tax would be if the property were taxable.
(7) Sufficient documentary proof must be submitted at the time of application.
(8) Acceptable documentary proof to show the property tax savings is passed on to the lessee may include but is not limited to the following comparisons:
(a) Current rental rate for any portion of that property occupied by nonexempt tenants;
(b) Historic rental rate data of that property;
(c) Rental rate used in a real market value appraisal for that property;
(d) Rent study of comparable or similar properties.
(9) The savings must be clearly evident. Insufficient proof or failure to show the rent is below market rent as described above is grounds for denial of the exemption.
(10) A statement that the "lessee is responsible for the taxes" is not sufficient proof of a tax savings.
(11) When used in reference to real property or tangible personal property, a lease is a contract of at least one year by which the owner of a property grants the rights of possession, use, and enjoyment of the property to another for a specified period of time in exchange for payment.
(12) Month-to-month tenancy or a general rental agreement is not considered the same as a lease for purposes of an exemption under this statute and will not qualify in an exemption claim.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.112
Hist.: RD 8-1988, f. 12-19-88, cert. ef. 12-31-88; RD 9-1989, f. 12-18-89, cert. ef. 12-31-89; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91, Renumbered from 150-307.112(1); RD 6-1993, f. 12-30-93, cert. ef. 12-31-93; RD 1-1995, f. 12-29-95, cert. ef. 12-31-95; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98
150-307.115(1)
Property Used for Public Park or Recreation
For property to qualify as an exempt public park or recreation site it must meet the standards for ownership and use.
(1) Owner means a nonprofit corporation that owns or is purchasing the property and meets the requirements of ORS 307.115(2).
(2) "Public use" means the property is open and available to all the people for lawful common uses without discrimination, limitations or restrictions other than those imposed by law or ordinance.
(3) Use of the property is not considered 'public use' when:
(a) Access is limited to persons paying a fee.
(b) Access is refused to persons who are unable to pay a fee.
(c) Access is restricted to events or activities determined by the owner.
(d) Access is limited due to the owner's activities.
(e) Entry is by invitation only from the owner.
(f) Entry is controlled by the desires of the owner.
(g) Entry contributes to the owner's financial interest.
(4) The following do not constitute public use and recreation:
(a) The owner sponsoring special events for public attendance.
(b) A mere byproduct of the owner's activities.
(c) Advertising public attendance to underwrite the cost of producing the owner's events.
(d) An activity which may financially benefit the owner.
(5) Nonqualifying activities of public park or recreation property includes and is not limited to: commercial business, industry, or trade, and income producing projects or ventures.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.115
Hist.: RD 6-1994, f. 12-15-94, cert. ef. 12-30-94
150-307.120
Guidelines for Exempt Port Property Subject to In Lieu Tax
(1) Definitions: Port property subject to in lieu of payments means property, excepting the dock area, that is leased to a taxable owner and used for discharging, loading or handling of cargo from ships, or for the temporary storage of cargo that is directly incidental to transshipment.
(a) "Discharging, loading, or handling of cargo from ships" is limited to activities during which no change in the cargo can occur while it is being discharged, loaded, or handled.
(b) "Temporary storage of cargo" means storage of cargo temporarily resting in place and awaiting further movement or shipment to another location.
(2) Property Subject to In Lieu of Payment:
(a) Certain properties exempt under ORS 307.120 are subject to one quarter of one percent (.0025) payments in lieu of taxes to schools. Properties subject to the in lieu of payments are those leased, rented or preferentially assigned on January 1, and used for storage of cargo directly incidental to transshipment.
(b) Dock area properties used for the berthing of ships, barges or other watercraft, (except floating homes as defined in ORS 830.700), or the discharging, loading or handling of cargo are exempt and are not subject to the payments in lieu of taxes to schools.
(c) A property not leased, rented or preferentially assigned on January 1, will not be subject to the in lieu of payment for the tax year for which the January 1, assessment date applies.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.120
Hist.: RD 16-1987, f. 12-10-87, cert. ef. 12-31-87; RD 11-1990, f. 12-20-90, cert. ef. 12-31-90; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; RD 8-1992, f. 12-29-92, cert. ef. 12-31-92; RD 6-1994, f. 12-15-94, cert. ef. 12-30-94; RD 9-1997, f. & cert. ef. 12-31-97; REV 4-1998, f. & cert. ef. 6-30-98
150-307.120(3)(a)
Request For Computation of In Lieu Tax Payment
(1) The request for computation of payment in lieu of tax is an annual request.
(2) To receive the in lieu tax computation in any year the taxpayer must:
(a) Have a possessory interest in the property;
(b) File a request using the Department of Revenue prescribed form;
(c) File the request form with the assessor in the county where the property is located;
(d) File the request form in the time prescribed by law;
(e) Provide a true copy of the lease or agreement that establishes the possessory interest; and
(f) Provide any other information the assessor deems necessary to complete the computation.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.120
Hist.: REV 8-1998, f. 11-13-98, cert. ef. 12-31-98
150-307.123
Strategic Investment Program
(1) The county shall establish a separate tax account for project investments (e.g. A-1 account for buildings and M & E, and when applicable, a separate personal property account).
(2) Value not defined in the eligible project is taxable in addition to the trended base (assessable portion of the eligible project).
(3) The agreement between the company and the county governing body shall state that the company shall file with the Department of Revenue the information required by ORS 308.285–308.290 on the annual industrial property return as if the property were taxable.
(4) The Department of Revenue shall be responsible for the following:
(a) Accumulating the invested cost on the eligible project from data provided by the company on their industrial property return.
(b) Determining the RMV of buildings, machinery and personal property identified as part of the eligible project.
(c) Transmitting the above data to the counties.
(5) The county assessor shall be responsible for:
(a) Determining the trended base at three percent annually (e.g. $100 million the first year, $103 million the second year).
(b) Allocating the trended base of the eligible project per ORS 307.123(1)(a).
(c) Determining the exempt value.
(6) The county assessor and governing body shall be responsible for determining the amount of the community services fee and establishing procedures for the billing, collection and distribution of the community services fee. Enforcement of the contracts or other agreements shall be the sole responsibility of the parties to the contract.
(7) Examples [Tables not included. See ED. NOTE.]
[Tables: Tables referrenced are available from the agency.]
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.123
Hist.: RD 1-1994, f. 6-21-94, 7-1-94, Renumbered from 150-307.110; RD 6-1994, f. 12-15-94, cert. ef. 12-30-94; RD 1-1995, f. 12-29-95, cert. ef. 12-31-95; RD 9-1997, f. & cert. ef. 12-31-97
150-307.126
Removal of Value of Federal Communication Commission (FCC) Licenses from the Unit Value of Centrally Assessed Property
(1) ORS 308.655 provides that the Department of Revenue has the authority to prescribe rules and regulations regarding property assessed under ORS 308.505 to 308.665. These statutes require the department to assess all property, real and personal, tangible or intangible, used or held for future use by a company as owner, occupant, lessee, or otherwise, for or in use in performing or maintaining a communications business.
(2) ORS 308.555 states the department may use unitary valuation to value all property of the company.
(3) For purposes of this rule, unitary valuation means valuing an integrated group of assets functioning as an economic unit as “one thing,” without reference to the independent value of the component parts. The value of a component part in a communication company lies not in the fact that the component part has an independent market value separate and apart from the unit, but that the component part is a part of a thoroughly complete and integrated communications company and has been valued as such. To determine the unitary value, one or more approaches to value are reconciled to arrive at a correlated system value, otherwise known as a unitary value.
(4) FCC licenses are exempt from ad valorem property taxation under ORS 307.126.
(5) A unitary valuation is used in developing the value of the total property centrally assessed under ORS 308.505 to 308.665. The contributory value of FCC licenses will be removed from the final correlated system value.
(6) The contributory value of the FCC licenses will be removed by applying a market-to-book ratio to the original cost of the FCC license. The market-to-book ratio is calculated by dividing the correlated system value by the net book value of the system’s taxable property (including the net book value of the FCC license value). The resulting ratio is then multiplied by the company’s reported FCC license cost to determine the estimated contributory license value to be subtracted from the correlated system value.
(7) For businesses that have been given FCC licenses and have no booked cost for the FCC license(s), the department will estimate a cost for the FCC licenses. The department will estimate the cost by considering various FCC license characteristics including but not limited to: frequency, geographical area, population served and date of acquisition.
Stat. Auth.: ORS 305.100, 308.205(2), 308.655
Stats. Implemented: ORS 307.126
Hist.: REV 17-2010, f. 12-17-10, cert. ef. 1-1-11
150-307.130-(A)
Review Required in Determining Exempt
Status of Property for Charitable Institutions
The following criteria shall be used
in determining the qualification for property tax exemption under ORS 307.130 when
an application is made by a charitable organization as required in 307.162, 307.112,
or 307.166:
(1) Purpose. The purpose
of this rule is to set forth, as a guide for assessors, those tests that are commonly
applied by the Oregon courts in determining whether property qualifies for exemption
under ORS 307.130. This rule does not include all of the principles that have been
used by the courts. The assessor must recognize that evaluation of an application
for charitable exemption must be made on a case-by-case basis in light of the specific
fact situation presented.
(2) Organization:
(a) Applicant must be an
incorporated institution;
(b) The corporation must
be organized as a nonprofit corporation. This is a mandatory first step for an organization;
however the status of an institution as a nonprofit corporation does not conclusively
endow it with the attributes of a charity. For example, an organization is recognized
by the Internal Revenue Service as income tax exempt within IRC (1954) Section 501(c)(3).
However, the standards for determining whether the income of an organization is
subject to federal income taxes and the question of whether property is exempt from
property taxes are separate and distinct. Thus, whether a corporation is a charity
is to be determined not only from its charter, but also from the manner in which
it conducts its activities;
(c) The organization must
separately account for funds and donations committed to charitable use;
(d) The organization must
not operate for the profit or private advantage of the organization’s founders
and officials; and
(e) The organization’s
articles of incorporation or bylaws must require that its assets be used for charitable
purposes when the organization dissolves.
(3) Property Interest:
(a) If application is made
under ORS 307.162 the organization must be the owner or purchaser of the property.
(b) If application is made
under ORS 307.112 the organization must be the lessee.
(c) If application is made
under ORS 307.166 the organization must be the lessee or entity in possession.
(d) Any organization claiming
the benefit of property tax exemption in subsection (3)(a), (b), or (c) under ORS
307.130, must have possession of and be using the property for the stated exempt
purpose by June 30 of the year in which the exemption is claimed.
(4) Purpose and Activity:
(a) Any organization claiming
the benefit of property tax exemption under ORS 307.130, as a charitable institution,
must have charity as its primary, if not sole, object and must be performing in
a manner that furthers that object.
(b) The activity conducted
by the charitable institution must be for the direct good or benefit of the public
or community at large. Public benefits must be the primary purpose rather than a
by-product. An organization that is established primarily for the benefit of its
members, is not a qualifying charity. For example, a rifle club formed primarily
for the pleasure of its members also provides safety information and instruction.
Since the club’s primary purpose is not to provide a direct benefit to the
public, its property is not exempt. An organization that performs a service to a
professional organization of private persons (example: teachers, physicians or architects)
is not a charity.
(c) If the activity of the
charitable institution relieves a government burden, it is an indicator that the
institution may be charitable. Failure to relieve a government burden will not disqualify
an organization as charitable.
(d) An element of gift and
giving must be present in the organization’s activities, relating to those
it serves. This element of gift and giving is giving something of value to a recipient
with no expectation of compensation or remuneration. Often, a charitable organization’s
product or service is delivered to recipients at no cost or at a price below the
market price or price to the organization of the product or service. Declarations
of worthwhile purpose and charitable endeavors must be manifested in concrete endeavors
and tangible reality which benefits the recipient. Unless this element of a gift
or giving is present promises of future worthy endeavors are meaningless by inaction,
and give the applicant no preferred status.
(A) Forgiveness of uncollectible
accounts does not by itself constitute a gift or giving.
(B) The fact that a business
activity actually operates at a loss does not make it charitable.
(C) The fact that an organization
charges a fee for its services does not necessarily invalidate its claimed status
as charitable. It is a factor to be considered in the context of the organization’s
manner of operation. In determining whether a fee-charging operation is charitable,
it is relevant to consider the following:
(i) Whether the receipts
are applied to the upkeep, maintenance and equipment of the institution or are otherwise
employed;
(ii) Whether patients or
patrons receive the same treatment irrespective of their ability to pay;
(iii) Whether the doors are
open to rich and poor alike and without discrimination as to race, color or creed;
(iv) Whether charges are
made to all and, if made, are lesser charges made to the poor or are any charges
made to the indigent.
(D) The fact that individuals
provide volunteer labor to assist the organization in performing its activities
may indicate that the organization is charitable. However, it is not a standard
in determining whether an organization is charitable per se.
(E) An institution shall
not be denied exemption solely because:
(i) Its primary source of
funding is from one or more government entities; or
(ii) The purpose or use of
the property is not limited to relieving pain, alleviating disease or removing constraints.
(5) Use. The property must
be used primarily for charitable purposes.
(a) There must be an actual
charitable use of the property rather than just a charitable use of the income derived
from the operation of the property. “Destination of income” theory does
not qualify the property for exemption. For example, use of property by a charitable
organization as a bingo parlor to raise money for a charitable activity is not an
actual charitable use of the property, and does not qualify the property for exemption.
(b) A retail store operated
by volunteers of a qualified organization may receive exemption if at least one-half
of the inventory is donated and consigned. One-half of the inventory refers to the
number of items. The total number of donated and consigned items must be at least
equal to the total number items that constitutes new merchandise.
(c) To be eligible for a
property tax exemption as a charitable institution, the applicant must be primarily
eleemosynary in nature. Such an institution will demonstrate two elements of charity.
First, the institution must perform a function or act which is good or beneficial
for humans and other living things. The second part entails a gift or act of giving.
The words “gift” and “giving” imply a voluntary act. While
an institution shall not be deprived of an exemption as a charitable organization
solely because its primary source of funding is one or more governmental agencies.
(d) The property shall be
actually used or occupied for the benevolent and charitable work carried on by the
organization.
(A) The use of the property
must substantially contribute to the furtherance of the charitable purpose and goal
of the organization. For example, a gift shop is located in a hospital qualifying
for exemption as a benevolent and charitable institution. The gift shop sells candy
and flowers and may be subject to ad valorem taxation, unless it furthers the charitable
purpose and goal of the organization. As another example, a cafeteria is located
in a hospital qualifying for exemption as a benevolent and charitable institution.
The cafeteria is operated primarily for the use of the hospital staff and is incidentally
used by the general public. The cafeteria is being used to contribute to the charitable
goal of the hospital, and is exempt from ad valorem taxation.
(B) Only the portion of a
property used for literary, benevolent, charitable or scientific purposes shall
be granted exemption from ad valorem taxation under ORS 307.130. Property may be
in part taxable and exempt. For example, a property otherwise qualifying for exemption,
has a barber shop operating within the facility. The portion of the building in
which the barber shop is located is subject to ad valorem taxation, unless the barbershop
furthers the charitable purpose and goal of the organization.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.130
Hist.: RD 6-1986, f. &
cert. ef. 12-31-86; RD 2-1988, f. 1-11-88, cert. ef. 1-15-88; RD 3-1988, f. &
cert. ef. 4-15-88; RD 11-1990, f. 12-20-90, cert. ef. 12-31-90; RD 8-1992, f. 12-29-92,
cert. ef. 12-31-92; RD 1-1995, f. 12-29-95, cert. ef. 12-31-95
150-307.130(1)
Literary Institution Defined
(1) A literary institution is an organization that is devoted to propagation and spread, or live performance of literature, study or use of books and body of writings in prose or verse, and scripts of plays both contemporary and classic.
(2) A literary institution must operate in a manner in which a significant portion of its activities are charitable. Property tax exemption must be denied when charitable activities are not present. OAR 150-307.130-(A) is the appropriate guideline for determining whether an organization is charitable.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.130
Hist.: RD 6-1994, f. 12-15-94, cert. ef. 12-30-94
150-307.140
Minimum Criteria Required in Determining Exempt Status of Property for Religious Organizations
(1) The following criteria, as a minimum, will be used in determining the qualification for property tax exemption of property of a religious organization under 307.140 when an application is made as required in ORS 307.162, 307.112 or 307.166:
(a) The applicant must be a religious organization.
(A) If the religious organization is the owner or purchaser of the property, application is made under ORS 307.162.
(B) If the religious organization is leasing, subleasing, or in a lease-purchase agreement for the property from a taxable owner, application is made under ORS 307.112.
(C) If the religious organization is leasing or subleasing the property from another exempt organization, application is made under ORS 307.166.
(b) The applicant must be the entity in possession of the property.
(c) The property for which a religious organization claims an exemption must be reasonably necessary to accomplish the religious objectives of that organization.
(d) The actual use of the property must be consistent with the claimed necessity.
(2) Only the portion of a property used for religious purposes shall be granted exemption from ad valorem taxation. Property may be in part taxable and exempt.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.140
Hist.: RD 10-1985, f. 12-26-85, cert. ef. 12-31-85; RD 6-1986, f. & cert. ef. 12-31-86; REV 17-2008, f. 12-26-08, cert. ef. 1-1-09
150-307.140(4)
Parsonage and Caretaker Residence Exemption Guidelines
(1) A parsonage or caretaker residence is considered primarily a residence even though incidental religious use may occur there. A parsonage or caretaker's residence is totally taxable unless it meets the criteria established in OAR 150-307.140.
(2) The following activities are examples of those which do not qualify the residence for an exemption:
(a) Living close to the church to deter vandalism;
(b) Opening and closing the church daily;
(c) Living close to the church for convenience sake or;
(d) Required living quarters for caretaker or pastor's family which do not meet conditions in OAR 150-307.140.
(3) A partial exemption may be granted when use of specific portions of the residence meet the criteria established in OAR 150-307.140.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.140
Hist.: RD 8-1991, f. 12-30-91, cert. ef. 12-31-91
150-307.145
Definition of Schools and Academies
(1) “Schools” and “academies”
mean educational institutions that:
(a) Offer education in kindergarten
or grades 1 through 12, or any combination of those grade levels; or are post-secondary
colleges or universities; and
(b) Provide a comprehensive
instructional program that is not limited to dance, drama, music, religious or athletic
instruction, or other special art or technical skill.
Example 1: An incorporated, charitable
nonprofit organization that promotes the arts in its community offers several weekly
dance classes at its Arts Center. The organization would not qualify for exemption
as a “school” or “academy” under ORS 307.145 because it
does not offer a comprehensive instructional program. Failure to qualify for exemption
under 307.145 does not preclude exemption under another statute if the property
qualifies for exemption under that statute.
Example 2: An incorporated
charitable school focuses on teaching children about a foreign culture through a
foreign language immersion program where children spend the school day speaking
and hearing a foreign language as they learn about literature, mathematics, science,
language, and social studies. The school would qualify for exemption under ORS 307.145
because it provides a comprehensive instructional program.
(2) Schools or academies focusing primarily
on providing on-the-job training do not qualify.
(3) To qualify for exemption
under ORS 307.145, a pre-school or pre-kindergarten must qualify as a “child
care facility” as defined in 307.145(3)(a).
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.145
Hist.: REV 7-2014, f. 12-23-14,
cert. ef. 1-1-15
150-307.147
Senior Center Property Exemption
The following criteria, as a minimum, is specific to senior center property only.
To qualify for an exemption, the primary use of a property must be providing senior services and activities, rather than a by-product of another group or activity.
Property used primarily for providing services and activities for senior persons may qualify for exemption.
"Primary use" means 51 percent or more of the time the property is actually used.
Eligible activities may include but are not limited to food service programs, exercise and health screening, estate planning seminars, arts and crafts workshops, dances or celebrations.
Only the portion of a property that is reasonably necessary and actually used is eligible for exemption. Actual use must be consistent with the qualifying activities.
An exemption shall not be denied due to incidental fund raising.
Some fund raising activities such as baked goods sales, salmon bakes, benefit breakfasts, and raffles or games of chance, may occur so long as those activities comprise 49 percent or less of the total activity time. The assessor shall deny any claim for exemption if a record of the activities is not provided upon request.
Activities which do not qualify include but are not limited to the following:
(1) A retail store, thrift store or gift shop whether stocked with consignment items, or donated goods does not qualify.
(2) Living quarters do not qualify.
The property may be in part taxable and exempt. A partial exemption may be granted when a specific portion of a property is used in a manner that does not qualify.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.147
Hist.: RD 6-1993, f. 12-30-93, cert. ef. 12-31-93; RD 6-1994, f. 12-15-94, cert. ef. 12-31-94, Renumbered from 150-307.130-(C)
150-307.150
Burial Grounds, Cemeteries, Crematories
(1) Buildings used exclusively to store machinery and equipment which is used solely for cemetery or crematory purposes are exempt.
Example: a crematory association owns a tool shed used solely to store maintenance machinery and equipment. The tool shed is exempt. Example: a caretaker's residence is owned by a cemetery association and is located on cemetery grounds. The caretaker's residence is taxable. Example: a funeral parlor is located on cemetery grounds. The funeral parlor is taxable.
(2) A pet cemetery is taxable. The assessor shall exempt only burial grounds of human remains.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.150
Hist.: RD 16-1987, f. 12-10-87, cert. ef. 12-31-87
150-307.162(1)
Application Process for Property Tax Exemption
(1) The applicant must specify the applicable exemption statute when filing a claim for exemption.
(2) It is not the county assessor or Department of Revenue's responsibility to determine under which statutory provision the applicant should apply.
(3) The assessor shall determine property tax exemption eligibility based on the exemption statute specified by the applicant on the application.
(4) The assessor shall return any application that is incomplete to the applicant for completion.
(5) If the assessor returns an application for completion or clarification, the applicant must return the application to the assessor within 15 days of the date it was mailed to the applicant or by the filing deadline, whichever is later, for the assessor to accept the application as a timely filing.
(6) Any application that is filed late must be accompanied by a late filing fee. If the applicant does not pay the late filing fee no exemption shall be allowed.
(7) If the exemption is denied by the assessor, the late filing fee shall be refunded to the applicant.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.162
Hist.: RD 10-1985, f. 12-26-85, cert. ef. 12-31-85; RD 16-1987, f. 12-10-87, cert. ef. 12-31-87; RD 9-1989, f. 12-18-89, cert. ef. 12-31-89; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; RD 6-1994, f. 12-15-94, cert. ef. 12-30-94; RD 1-1995, f. 12-29-95, cert. ef. 12-31-95; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98
150-307.166
Property of Exempt Entities Leased
to Other Exempt Entities
(1) For purposes of ORS 307.166, a lease
or other agreement means any written document that communicates the terms and conditions
of tenancy. A verbal agreement will not qualify in an exemption claim.
(2) Public body property
which is leased or used by another public body is exempt from property taxes when
the property is used by the lessee for a qualifying exempt purpose on July 1 of
the assessment year to be exempted.The public body granting possession and use of
their property must provide notice of the lease or other agreement to the assessor
after entering the agreement. If requested by the assessor, a copy of the lease
or other agreement must be provided.
(3) When public body property
is subsequently leased to another entity other than a public body whose property
is exempt from taxation, filing a timely application for a property tax exemption
is required.
(4) When property of entities
that are not public bodies but whose property is exempt from taxation is leased
to a public body an application for a property tax exemption is also required.
(5) When application is required,
late filing is permitted. Payment of the late filing fee must be submitted with
the application. The late filing fee cannot be excused or waived.
(6) Except where a public
body has leased or granted possession and use to another public body and notified
the assessor as required, the assessor must be satisfied that the amount of rent
charged is below market rent. For purposes of this statute, the definition, application,
and examples explaining market rent are found in OAR 150-307.112.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.166
Hist.: RD 8-1991, f. 12-30-91,
cert. ef. 12-31-91; RD 8-1992, f. 12-29-92, cert. ef. 12-31-92; RD 6-1993, f. 12-30-93,
cert. ef. 12-31-93; RD 5-1996, f. 12-23-96, cert. ef. 12-31-96; RD 9-1997, f. &
cert. ef. 12-31-97; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98; REV 3-2014, f.
& cert. ef. 7-31-14
150-307.175
Property Tax Status of Alternative Energy Systems
(1) Definitions:
(a) "Alternative energy system"
means a solar, geothermal, wind, water, fuel cell or methane gas energy system used
for the purpose of heating, cooling or generating electricity.
(A) Solar alternative energy
systems use the sun and may include but are not limited to:
(i) Solar electric or photovoltaic
(PV) systems that consist of solar electric panels (photovoltaic cells) that convert
sunlight directly into electricity and may include connective wiring, solar electric
modules, inverter, mounting system, disconnection equipment, net-metering system,
and storage batteries,
(ii) Solar heating or cooling
systems that consist of active, passive, and thermal systems used for water, or
space heating or cooling and may include south facing windows, trombe walls, extra
thick concrete/stone floors designed for the absorption of heat, thermal chimneys,
solar panels or collectors which directly heat coils of water on the roof or outside
walls, extra hot water storage tanks, connecting piping, sensors, valves, pumps,
heat exchangers, and controls.
(B) Geothermal alternative
energy systems use heat extracted from the earth and may include but are not limited
to geothermal heat pumps (GHPs), which can be used for both heating and cooling
of buildings and hot water needs.
(i) Ground source geothermal
heat pumps consist of buried loops or coils of tubing used to exchange heat.
(ii) Water source geothermal
heat pumps consist of loops submerged in a lake, pond or well.
(C) Wind alternative energy
systems produce mechanical or electrical power or energy. Wind turbines typically
consist of a propeller driven generator attached to a building or tower used to
drive a direct current generator which is generally tied to a battery storage system
and used to power household or business needs. The system may be connected to a
net-metering system or be completely off-grid. These systems may include:
(i) Small stand-alone wind
turbines.
(ii) Groups of wind turbines.
(D) Water alternative energy
systems or hydropower systems are used to generate electricity. These systems may
include but are not limited to micro hydro systems which are small-scale facilities
providing electricity to power homes, small farms, and businesses. Micro hydro systems
typically consist of a small water drive wheel or turbine which is connected to
an electric generator and the output is connected to the user by power wiring. These
systems may include a storage battery system and net-metering system.
(E) Fuel cell alternative
energy systems produce electricity electrochemically and non-reversibly, using hydrogen-rich
fuel and oxygen, producing an electric current, water, and thermal energy. These
systems may include but are not limited to fuel cell systems using reformed fossil
fuels which also produce carbon dioxide.
(F) Methane gas alternative
energy systems are typically gas collection systems used to fuel an electric generator
and may also include methane digester systems. These systems may include but are
not limited to:
(i) Methane collection systems
installed at closed or partially closed land fills and used to fuel electric generator
systems.
(ii) Methane digester systems
owned by and installed at dairy farms and used to generate power.
(b) “Onsite”
means a single, operationally integrated complex of property or properties composed
of a single parcel of land and improvements thereon or a group of adjacent parcels
and improvements thereon.
(2) Alternative energy systems
qualify for exemption only if the system is a net metering facility, as defined
in ORS 757.300, or is primarily designed to offset onsite electricity use.
Example 1: A company installs solar
panels to generate electricity. The solar energy system is installed as a net metering
facility. Therefore, the solar energy system qualifies for the property tax exemption.
Example 2: A utility owns
a large wind generating farm. The system is not a net metering facility nor is it
designed to offset onsite electricity use. Therefore, the wind energy system does
not qualify for the property tax exemption.
Example 3: A methane collection
system installed at a closed portion of an otherwise active landfill is used to
fuel an electric generating facility to produce electricity used to offset power
use at the active portion of the landfill. The system qualifies for the property
tax exemption.
Example 4: A methane digester
system installed at a dairy farm is used to fuel an electric generator system to
generate power for the dairy farm’s operations. This qualifies for exemption.
Example 5: An industrial
facility installs a methane collection system where methane gas is compressed and
used as a fuel source to generate electricity for the facility’s operations.
This qualifies for exemption.
(3) Alternative energy systems that
provide heating, cooling or that generate electrical energy for personal consumption
qualify for the property tax exemption only to the extent that they are primarily
designed to offset onsite electricity use or are net metering facilities.
(4) Alternative energy system
devices and components are exempt to the extent that they add real market value
(RMV) to the property. Additional value accruing to property to which a qualified
alternative energy system is installed due to the existence of such a system is
exempt.
(5) Examples of property
that typically do not qualify for the exemption include but are not limited to porches,
sunrooms, solariums, and greenhouses.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.175
Hist.: RD 2-1988, f. 1-11-88,
cert. ef. 1-15-88; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; REV 10-2002, f. &
cert. ef. 12-31-02; REV 9-2008; f. & cert. ef. 9-23-08; REV 3-2014, f. &
cert. ef. 7-31-14
150-307.180
Qualifications for Exemption of Indian Properties
The following criteria shall be used to determine the qualification for property tax exemption under ORS 307.180 when land is not held in trust for the tribe or for an individual by the federal government.
(1) Property must be located within the tribal boundaries of the reservation.
(2) The owner must be an enrolled tribal member residing on the reservation but not necessarily on the property. Example: an enrolled tribal member owns farmland on the reservation but maintains a household in a housing unit on the reservation. The farmland is exempt from taxation.
(3) Property may be leased to a non-Indian and retain tax-exempt status. Example: an enrolled tribal member living on the reservation leases all farmland to a non-Indian farmer. The farmland is exempt from taxation.
(4) Personal property leased to a tribal member and delivered on the reservation is exempt. Property leased to a tribal member, delivered off the reservation but used on the reservation is also exempt.
[NOTE: A lease-purchase agreement is different than a lease, therefore property covered by a lease-purchase agreement might be taxable.]
(5) Fee title ownership of land located on the reservation by an enrolled tribal member of that reservation does not negate the tax-exempt status of that land.
(6) Marriage between an enrolled tribal member and a non-Indian spouse will not, of itself, jeopardize the tax-exempt status of the land they hold together on the reservation.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.180
Hist.: RD 8-1988, f. 12-19-88, cert. ef. 12-31-88
150-307.183
Valuation of Summer Home Properties
(1) Real property belonging to the United States leased for summer homes is exempt from taxation. This exemption applies only to the land. Leased fee and leasehold (or possessory) interests in the land are exempt. No value for land shall be shown on the assessment roll.
(2) Improvements to the land are site developments and are taxable. Site developments include such items as water systems, septic systems, roadways, electrical service, and landscaping. The value of site developments shall be included on the improvement portion of the assessment roll.
(3) Improvements on the land such as buildings and structures are taxable.
(4) Appraisal methods for valuing these properties will vary depending on available market data. Regardless of the method used, care and consideration must be taken to avoid taxation of the land or any interests in the land. Appraisal methods to be used include:
(a) Reproduction or replacement cost new less allowances for various forms of depreciation.
(b) Sales comparison of summer home properties which may be owned fee simple. In using this method, care must be taken to recognize the tenuous nature of Forest Service leases and permits.
Example: Comparison of improvements. Sales of comparable improved properties owned in fee simple indicate a market value of $75,000. The land value for these properties is indicated from land sales to be $15,000. Thus, an indicated value of $60,000 ($75,000 - $15,000) is indicated for the improvements of the subject summer home property. This value may not be applicable for the summer home property if the lease term (or expected continuation of the lease) is less than the anticipated life of the improvements.
Example: Land to property ratio. Sales of comparable improved properties owned in fee simple indicate a land to property ratio of 20% and a market value of $75,000 for the subject summer home property. Thus, the indicated value for the summer home property is $60,000 (80% times $75,000).
(c) Income capitalization. This approach is generally not applicable to summer home properties because they are not typically rented on a month-to-month basis. Also, lease payments made to the U. S. government for use of the land are usually very favorable to the lessee, making capitalization of this income stream unreliable as a value indicator.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.183
Hist.: RD 9-1992, f. 12-29-92, cert. ef. 12-31-92
150-307.190
Exception To Taxable Personal Property
(1) Tangible personal property is assessed and taxed unless statutes specifically grant an exemption.
(2) "Use" of the property is the determining factor for granting an exemption.
(a) Tangible personal property used exclusively for personal use and enjoyment by the owner is granted exemption from property tax.
(b) Tangible personal property used in a trade or business is taxable. A trade or business is an activity performed for any form of compensation, personal reward or gain.
(c) Tangible personal property that is used both for the owner's personal use and as part of a trade or business is taxable.
Example: Household furnishings in a Bed and Breakfast or adult foster home are taxable when used by anyone other than the owner. Items used exclusively by the owner for personal enjoyment are exempt from property tax, such as the bed where the owner sleeps and the armoire or dresser that contains the owners clothes.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.190
Hist.: RD 1-1995, f. 12-29-95, cert. ef. 12-31-95
150-307.210
Water Association Qualifications
(1) For purposes of ORS 307.210:
(a) "Water Associations" are wholly mutual or cooperative in character and have the following characteristics;
(A) Each incorporated association is organized as a wholly mutual or cooperative association or, if organized as a nonprofit organization, its bylaws provide that it operate as a wholly mutual or cooperative association.
(B) An unincorporated association provides in its bylaws that the association is wholly mutual or cooperative in character and is not to produce a profit.
(b) "Domestic Water Use" is all household and outdoor uses that may include watering of livestock, lawn, garden, and farm irrigation.
(c) "Commercial Water Use" is use by an industrial or business establishment where the production of a product for resale is the company's main operation.
(2) Exempt water association property may include but is not limited to parcels of land, dams, man made and natural wells, reservoirs and diversion works, purifying, processing, treating facilities and chemicals, flumes, canals and ditches, pipe and pipe pushers, gates, valves, pressure tanks, pumps and pump houses, hoses, meters and meter boxes, cutting and threading machines, bulldozers, cranes, tractors and hand tools.
(3) The following property is not exempt and shall be classified and assessed in the same manner as other property subject to assessment and taxation.
(a) Property that is not owned by the association.
(b) Property that is owned by the association but is not used primarily in storing, conveying or distributing water.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.210
Hist.: 3-56; 1-58; 11-59; 1-66; 3-70; 11-71; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; RD 9-1997, f. & cert. ef. 12-31-97; REV 13-1999, f. 12-30-99, cert. ef. 12-31-99
150-307.210(5)
Water Association Exemption Under ORS 307.210 Is Assessor's Responsibility
(1) The Assessor shall consider all water association exemption applications and determine whether any portion of the property is exempt.
(2) The water association shall include the information and data required on the exemption application form 150-310.013 to claim exemption.
(3) The Assessor may request additional information from the water association.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.210
Hist.: REV 4-1999, f. 12-1-99, cert. ef. 12-31-99
150-307.220-(A)
Jurisdiction Over Assessment of Telephonic Companies
(1) ORS 307.220 provides for the exemption from taxation of certain property, except parcels of land and buildings, owned by qualified associations used exclusively in the construction, maintenance, and operation of a telephonic communication system.
(2) Any property owned, rented, leased or occupied by an association used exclusively in the construction, maintenance, and operation of a telephonic system and not exempt will be classified and assessed pursuant to ORS 308.505 to 308.660.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.220
Hist.: 6-61; 1-66; 3-70; 11-71
150-307.220-(B)
Qualifications for Exemption of Mutual or Cooperative Telephone Associations
(1) Qualifying Conditions. Property owned by a mutual or cooperative telephone association is qualified for exemption if all the following conditions are satisfied:
(a) Ownership. The property must be owned by an association of persons that:
(A) Is wholly mutual or cooperative in character, whether incorporated or not. The characteristics of a mutual or cooperative association are:
(i) Each incorporated association is organized as a cooperative association or, if organized as a nonprofit organization, its bylaws provide that it operate as a cooperative association.
(ii) Each unincorporated association provides in its bylaws that the association is mutual or cooperative in character and is not to produce profit.
(iii) While one member may hold more stock or shares in the association than another member, voting cannot be based on ownership of shares, stock, certificates, or other evidence of their interest. Voting must be restricted to one vote to a member, or in proportion to their actual, estimated or potential patronage, as the bylaws may provide, except that in no event may any one member thereby exercise a majority vote.
(iv) All members must share proportionately, according to their evidence of interest, in the cost of construction, maintenance, and operation of the association's properties, and in the division of any surplus or reserves accumulated when such a surplus or reserve is not necessary for proper maintenance or construction of such system or all members must share in proportion to their patronage as the bylaws may provide.
(B) Operates without profit in money.
(C) Has no business or purpose other than the provision of telephone communications service.
(b) Use. All persons served must be members and must own shares, stock, certificates, or other evidence of their interest.
(c) Value. The association's telephone property has a real market value of not more than $2,500 as determined by the Department of Revenue.
(d) Operation. The association's telephone communication system operation is conducted without the ownership, operation or lease of telephonic switchboard exchange facilities, or direct or indirect ownership of stock in any telephone switchboard association, partnership or corporation.
(2) Eligible Property. Property that may qualify for exemption includes all property consisting of improvements, fixtures, equipment and supplies used exclusively in the construction, maintenance, and operation of a telephone communication system. Examples of property that may qualify for exemption include but are not restricted to:
(a) Poles, crossarms, guy stubs and guy wire;
(b) Aerial wire;
(c) Aerial or underground cable;
(d) Suspension strand;
(e) Insulators;
(f) Terminals;
(g) Drop and blockwire;
(h) Telephones.
(3) Ineligible Property. The following types of property that cannot qualify for exemption will be classified and assessed pursuant to ORS 308.505 to 308.660.
(a) Parcels of land and buildings owned, leased, rented, chartered or otherwise held for or used by an association in a telephone communication system.
(b) Any other property not owned by the association but used or held by it in a telephone communication system.
(c) Any property owned, leased, rented, chartered or otherwise held by an association and not used in providing telephone communication.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.230
Hist.: 6-61; 1-66; 3-70; 11-71; REV 10-2002, f. & cert. ef. 12-31-02
150-307.230-(A)
Jurisdiction over Assessment of Non-public Telephonic Systems
(1) ORS 307.230 provides for the exemption from taxation of all property owned by any person not engaged in public service operation and used exclusively in the construction, maintenance and operation of a telephone communication system serving exclusively property owned or operated by such person.
(2) Any property owned, rented, leased or occupied by a person not engaged in public service and used exclusively in the construction, maintenance and operation of a telephone communication system and not exempt will be classified and assessed pursuant to ORS 308.505 to 308.660.
(3) "Person" has the same meaning as defined in ORS 311.605.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.230
Hist.: 6-61; 1-66; 3-70; 11-71
150-307.230-(B)
Qualifications for Exemption for Privately Owned Telephone Systems
(1) Qualifying Conditions. Property as part of privately owned telephone systems is qualified for exemption if all the following conditions are satisfied:
(a) Ownership. The property must be owned by a person not engaged in public service operation.
(b) Use. The property is used exclusively in the construction, maintenance and operation of a telephone communication system serving exclusively property owned or operated by such person.
(c) Value. The person's telephone property has a real market value of not more than $1,500 as determined by the Department of Revenue.
(d) Operation. The person's telephone communication system operation is conducted without ownership, operation or lease of telephone switchboard exchange facilities, or direct or indirect ownership of stock in any telephone switchboard association, partnership or corporation.
(2) Eligible Property. Property that may qualify for exemption includes all property owned consisting of improvements, fixtures, equipment and supplies, used exclusively in the construction, maintenance and operation of a telephone communication system. Property that may qualify for exemption includes but is not restricted to the examples listed in OAR 150-307.220-(B)(2).
(3) Ineligible Property. The following types of property which cannot qualify for exemption will be classified and assessed in accordance with provisions of ORS 308.505 to 308.660:
(a) Parcels of land and buildings owned, leased, rented, chartered or otherwise held for or used by a person in a telephone communication system.
(b) Any other property not owned by a person and used or held in a telephone communication system.
(c) Any property owned, leased, rented, chartered or otherwise held by a person and not used in providing telephone communication.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.230
Hist.: 6-61; 1-66; 3-70; 11-71; REV 10-2002, f. & cert. ef. 12-31-02
150-307.240-(B)
Application for Exemption Under ORS 307.220 or 307.230
(1) The application for exemption must contain all data required on the form prescribed by the Department of Revenue. The application for the first year in which an exemption is requested must be filed on or before March 15, and the Department will act upon the application within 30 days after receipt of the application.
(2) The Department will examine all applications and determine:
(a) Whether or not the applicant constitutes the type and kind of organization or owner described in ORS 307.220 or 307.230;
(b) What properties are entitled to exemption; and
(c) The parcels of land which will be assessed by the Department and those which will be assessed by the county assessor.
(3) The Department may require supplementary information from the applicant and may make a field examination to substantiate eligibility of the property for exemption.
(4) Upon initial qualification by an association or person, the Department will prepare and mail to the association or person (with a copy to the assessor) an exemption order containing a general description of property exempt under ORS 307.220 or 307.230.
[Forms: Forms referrenced are available from the agency.]
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.240
Hist.: 6-61; 1-66; 3-70; 11-71; 12-31-77; TC 2-1978, f. & cert. ef. 3-16-78; REV 10-2002, f. & cert. ef. 12-31-02
150-307.241
Definition of Elderly
Funded exemptions are granted to qualifying non profit homes for the elderly under ORS 307.241 to 307.245. For purposes of 307.241 to 307.245 and 307.375, the term "elderly" refers to a person 62 years of age or older. This rule is to assist in determining the eligibility of a nonprofit home for a funded property tax exemption.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.241
Hist.: RD 9-1989, f. 12-18-89, cert. ef. 12-31-89
150-307.242(2)
Documents to Accompany Claim
Claims filed under ORS 307.241 to 307.245 must be approved by the assessor and shall be submitted by the assessor to the Department of Revenue accompanied by all data required by the Department as necessary for the assessor to approve the claim. The Department shall review the claim and other material and shall notify the assessor in writing of its approval or rejection of the claim. The assessor shall not notify claimant of county approval of the claim until notification of Department action on the claim has been received.
All claims submitted to the Department of Revenue shall be accompanied by:
(1) Copy of completed federal or state government form Project Income Analysis and Appraisal;
(2) Statement from claimant showing current year rents certified by U.S. Department of Housing and Urban Development or Oregon Housing Division and a statement of total income for the nonprofit home listing rent for each living unit, leased or rented commercial area and income from any other source;
(3) Statement from assessor showing use, square footage and income from space in home either leased or rented or available for lease or rental for commercial use. Space designed or planned for commercial use but not in commercial use must be available to or in use by the residents of the home or that space is not eligible for tax exemption;
(4) Statement from assessor that all land on which the tax exemption is claimed is or is not used by the applicant as described in the exemption claim for nonprofit housing, recreation, social facilities and care for the elderly;
(5) Statement from assessor showing division of total project value, land and improvements, eligible and not eligible for property tax exemption;
(6) Statement from the claimant showing how exemption granted in any previous year has been reflected by a reduction in the amount of rent that would otherwise have been paid for occupancy of the facility by its residents. If the claimant states the rent, as certified for the home by the U.S. Department of Housing and Urban Development or Oregon Housing Division, does not contain an amount for property tax a letter signed by a representative of the government agency involved is required. Where rent charged does contain an amount for property tax the claimant must provide a listing showing individual living unit rents as certified by the government agency and the amount each of those rents was reduced in the previous year to reflect the tax exemption.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.242
Hist.: TC 7-1980, f. 11-28-80, cert. ef. 12-31-80
150-307.250
Defining "Surviving Spouse”
of a Veteran
(1) “Surviving spouse”
of a veteran means:
(a) A man or woman who is legally
married to a veteran at the time of the veteran's death; or
(b) A man or woman who is joined
in a registered domestic partnership with a veteran at the time of the veteran’s
death. “Domestic partnership” has the meaning given that term as defined
in ORS 106.310, and the partnership must meet the provisions of ORS 106.300 to ORS
106.340, also known as the Oregon Family Fairness Act (OFFA).
(2) “Surviving spouse
remaining unmarried of a veteran” means the individual does not enter into
a new marriage or registered domestic partnership following the death of the veteran.
(3) The exemption applies only
to the period before the date of the first new marriage or registered domestic partnership
of the surviving spouse after the death of the veteran.
(4) If a surviving spouse of
a veteran enters into a new marriage or registered domestic partnership following
the death of the veteran and that marriage or partnership is annulled by a court
having jurisdiction to do so, the surviving spouse will be restored to his or her
previous status as a surviving spouse remaining unmarried of a veteran.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.250
Hist.: RD 1-1995, f. 12-29-95,
cert. ef. 12-31-95; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98, Renumbered from
150-307.250(1)(d); REV 5-2009, f. & cert. ef. 7-31-09; Renumbered from 150-307.250(1)(c)
by REV 4-2011, f, 12-30-11, cert. ef. 1-1-12
150-307.260(1)(a)
Veteran's Exemption for Surviving Spouse
(1) If a qualified veteran dies after making timely application, the exemption shall continue on the property for the surviving spouse for the assessment year for which the application was made.
(2) The surviving spouse must own and live on the property and make a timely application in the following year to continue the exemption.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.260
Hist.: RD 8-1992, f. 12-29-92, cert. ef. 12-31-92; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98, Renumbered from 150-307.206(1)-(C)
150-307.260(3)
Physician Certification of Disability for Exemption
(1) A veteran described under ORS 307.250(2)(b) must be certified annually by a physician as having a disability rating of 40 percent or more.
(2) The veteran must file the physician’s certificate annually with the Exemption Claim form and their statement of total gross income.
(3) The veteran must file the physician’s certificate annually up to and including age 65. Once the veteran reaches the age of 66 and has filed the physician’s certificate in the previous year, the veteran is no longer required to file the certificate but is required to file annually the Exemption Claim form and the statement of total gross income.
Example: A veteran 64 years of age files the physician’s certificate with the Exemption Claim form and their statement of total gross income on or before April 1, 2009. He then has his 65th birthday on May 15, 2009. The veteran must file the physician’s certificate with the Exemption Claim form and income statement when he next files on or before April 1, 2010. On May 15, 2010, the veteran has his 66th birthday. Since the veteran is now 66 years of age and previously filed the certificate after his 65th birthday, he is no longer required to file the certificate but is required to file his Exemption Claim form and statement of total gross income on or before April 1, 2011, or for any year thereafter.
(4) A veteran with a physician-certified permanent disability must be rated as having disabilities of 40 percent or more to qualify for the exemption.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.260
Hist.: RD 8-1992, f. 12-29-92, cert. ef. 12-31-92; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98, Renumbered from 150-307.260(1)-(A); Renumbered from 150-307.250(1)(b) by REV 11-2009, f. 12-21-09, cert. ef. 1-1-10
150-307.270(1)-(A)
Property to Which Veteran's Exemption Applies
(1) Definitions for the purpose of this rule:
(a) “Basic life needs” include, but are not limited to, preparation of meals, personal hygiene, or daily care of oneself.
(b) “By reason of health” means to obtain medical care or to receive basic life needs.
(c) “Temporary absence” means absence with the intention to reoccupy the homestead, similar to a domicile. Examples include but are not limited to temporary vacation, business travel, or military service.
(2) If a qualified veteran or surviving spouse owns only an undivided interest in a property and the remaining interest is owned by a nonspouse or a nonveteran, the veteran is entitled to a tax exemption only to the extent of the veteran's actual ownership interest in the homestead property.
Example 1: A qualified veteran owns an undivided one-half interest in a manufactured structure that has an assessed value of $10,000. The remaining undivided one-half interest is in the name of the veteran's son. The veteran will be allowed an exemption of $5,000, which is one-half the assessed value of the manufactured structure. The remaining undivided interest is not entitled to an exemption unless the person owning the remaining one-half interest is a qualified veteran who also occupies the same homestead property.
(3) Only one exemption for each qualified veteran is allowed in any tax year. Two or more qualified veterans may each receive an exemption on the same homestead property if each veteran owns, lives on the property, and files timely.
(4) The right to claim the exemption will not be lost if the claimant is temporarily absent from the property or is required to live away from the homestead by reason of health. Examples of absence by reason of health may include, but are not limited to:
(a) Confinement to a nursing home or other long-term care facility; or
(b) Receiving care at a family member’s or other individual’s home.
Example 2: An Oregon resident who qualifies for the veteran’s property tax exemption on their homestead stays in Arizona for a few months during the year. Although temporarily absent from their homestead, it continues to qualify as their primary residence because the claimant has the intention of returning.
Example 3: Due to failing health, the claimant moves to her daughter’s home. After eighteen months, it becomes apparent it is unlikely the claimant will ever be able to return to her own home. Although the claimant did not remain in her home, the property continues to qualify as her primary residence and is eligible for the exemption because the claimant was absent by reason of health.
(6) If the assessor is notified or has reason to believe the claimant is not living at the primary residence by reason of health, the assessor may request documentation that proves continued eligibility for the exemption. An example of documentation is a letter from a medical provider stating the claimant is unable to provide their own basic life needs.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.270
Hist.: RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; RD 6-1994, f. 12-15-94, cert. ef. 12-30-94; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98, Renumbered from 150-307.270; REV 11-2009, f. 12-21-09, cert. ef. 1-1-10
150-307.270(1)-(B)
Transfer of Veteran's Exemption to a Different Property Requires Refiling
(1) The exemption provided for veterans or surviving spouses under ORS 307.250 does not automatically transfer from one property to another property.
(2) The veteran or surviving spouse will need to file a new application with the county assessor where the property is located to claim the exemption.
(3) The late filing provision allowed under ORS 307.260(1)(c)(B) is not applicable when the exemption is claimed for a new or different property.
(4) A written claim must be filed on or before April 1 of the assessment year for which the exemption is claimed. When the designated property is acquired after March 1 but prior to July 1, the claim shall be filed within 30 days after the date of acquisition.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.260
Hist.: RD 9-1989, f. 12-18-89, cert. ef. 12-31-89; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; RD 8-1992, f. 12-29-92, cert. ef. 12-31-92, Renumbered from 150-307.260(1); RD 6-1993, f. 12-30-93, cert. ef. 12-31-93; RD 6-1994, f. 12-15-94, cert. ef. 12-30-94; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98, Renumbered from 150-307.260(1)-(B)
150-307.270.(1)(C)
Veterans Property Held in Trust
To receive an exemption on property that is held in a trust, the trust must be clearly identified as revocable for the specific property on which a claim for exemption is filed under ORS 307.250 and an application is made as required in 307.260
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.270
Hist.: RD 9-1989, f. 12-18-89, cert. ef. 12-31-89; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98, Renumbered from 150-307.250
150-307.286
Oregon Active Military Service Member's Exemption -- Eligibility
For purposes of ORS 307.286:
(1) A qualifying service member's homestead:
(a) Must be the qualifying service member's principal residence that is located in Oregon;
(b) Must be owned by the qualifying service member prior to July 1 of the tax year for which exemption is claimed;
(c) May be a personal property manufactured structure or a floating home; and
(d) Includes land under a manufactured structure if the land is owned by the qualifying service member.
(2) The right to claim the exemption will not be lost if the qualifying service member is temporarily absent from the homestead during the tax year for which exemption is claimed. Temporary absences include absences for vacation, business travel, hospitalization, or military service.
(3) The exemption allowed under ORS 307.286 is limited to the lesser of the:
(a) Assessed value of the homestead property owned by the qualifying service member; or
(b) Statutory limitation, which is equal to $60,000 for the 2005-06 tax year and adjusted annually as described in ORS 307.286(2).
Example 1: A qualified service member owns a homestead that has an assessed value of $80,000. Because the assessed value of the homestead is more than $60,000, the exemption allowed is $60,000 for the 2005-06 tax year.
Example 2: A qualified service member owns a homestead consisting of a manufactured structure and the land upon which it is located. The manufactured structure is assessed as real property and has an assessed value of $40,000. The land upon which the structure is located has an assessed value of $15,000. Because the assessed value of the manufactured structure and the land combined is less than $60,000, the exemption allowed is $55,000 for the 2005-06 tax year. The amount of the exemption cannot exceed the assessed value of the homestead property.
Example 3: A qualified service member owns a homestead consisting of a manufactured structure, but does not own the land upon which it is located. The manufactured structure is assessed as personal property and has an assessed value of $50,000. The exemption allowed for the 2005-06 tax year is $50,000 and only applies to the manufactured structure. The exemption does not apply to the land, because the qualified service member does not own the land.
(4) An Oregon resident is eligible for the exemption provided under ORS 307.286, if:
(a) The individual is serving in the Oregon National Guard, military reserve forces, or other U.S. state’s or territory’s organized militia;
(b) The individual has been ordered to federal active duty under Title 10 United States Code (USC), or a deployment under the Emergency Management Assistance Compact; and
(c) The period of active duty exceeds 178 consecutive days.
(5) The qualifying service member must attach documentation to the claim for exemption that shows proof of active duty during each tax year for which exemption is claimed. The service member may claim the exemption for each tax year during which at least one day was served on active duty.
(a) Examples of valid documentation include, but are not limited to: military orders, form DD214, a letter on military letterhead, or other military record.
(b) Acceptable documentation for the exemption must show:
(A) Service in the Oregon National Guard, military reserve force, or other U.S. state’s or territory’s organized militia; and
(B) Service performed for more than 178 consecutive days in federal active duty under Title 10 USC or in deployment under the Emergency Management Assistance Compact on or after January 1, 2005.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.286
Hist.: REV 4-2006, f. & cert. ef. 7-31-06; REV 7-2008, f. 8-29-08, cert. ef. 8-31-08
150-307.289
Oregon Active Military Service Member's Exemption Claimed By Lawful Occupant
For purposes of ORS 307.289:
(1) “Qualifying duty” means:
(a) An Oregon resident is serving in the Oregon National Guard, military reserve forces, or other U.S. state’s or territory’s organized militia;
(b) The individual has been ordered to federal active duty under Title 10 United States Code (USC), or a deployment under the Emergency Management Assistance Compact;
(c) The individual was ordered or deployed on or after January 1, 2005; and
(d) The period of ordered active duty service exceeds 178 consecutive days.
(2) A qualifying service member's homestead:
(a) Must be the qualifying service member's principal residence that is located in Oregon;
(b) Must be owned by the qualifying service member prior to July 1 of the tax year for which exemption is claimed;
(c) May be a personal property manufactured structure or a floating home; and
(d) Includes land under a manufactured structure if the land is owned by the qualifying service member.
(3) A lawful occupant is an individual who is using the qualifying service member's homestead as his or her principal residence at the time the claim is filed.
(a) The lawful occupant is not required to hold an ownership interest in the homestead.
(b) A lawful occupant may include, but is not limited to, a qualifying service member's: spouse, parent, adult child, or other relative; domestic partner; or roommate. A neighbor or caretaker, who has a key to the qualifying service member's homestead, but for whom the homestead is not a principal residence, does not qualify as a lawful occupant.
(4) The lawful occupant may claim the homestead exemption if the service member would otherwise qualify for this exemption but died while performing the qualifying duty during the current or prior tax year and before filing a claim.
(a) An individual claiming to be a lawful occupant must attach documentation to the claim for exemption that demonstrates the homestead is his or her principal residence at the time claim is made. The county assessor may require more than one piece of documentation.
(b) Documentation may include, but is not limited to, a valid driver's license, passport, election registration card, or the most recent property tax statement for the homestead.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.289
Hist.: REV 4-2006, f. & cert. ef. 7-31-06; REV 7-2008, f. 8-29-08, cert. ef. 8-31-08
150-307.320
Agricultural Land Devoted to Agricultural Purposes as Real Property
(1) The term "land" as used in ORS 307.320 differs from the definition of "land" in 307.010(1) in that it is limited to the land itself. It is land that has a classification as agricultural land and is being used for agricultural purposes such as raising and harvesting crops or rearing, feeding and management of livestock.
(2) For the purpose of advalorem taxation, deciduous trees, shrubs, plants and crops in, under, or growing upon agricultural land devoted to agricultural purposes are wholly exempt from such taxation and need not be listed upon the assessment roll. (See OAR 150-308.235.)
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.320
Hist.: 1-58; 11-59; 1-66; 3-70; TC 7-1980, f. 11-28-80, cert. ef. 12-31-80; RD 9-1984, f. 12-5-84, cert. ef. 12-31-84
150-307.330
Exemption of Buildings, Structures and Machinery or Equipment during Construction
(1) Definitions for purposes of ORS 307.330 and this rule:
(a) “Addition” means any enlargement of an existing building or structure. This includes the construction of additional stories or the erection of a new wing on an existing building.
(b) “Building” means all real property improvements erected upon the land such as hotels, office buildings, retail stores, condominiums and manufacturing plants and includes heating and ventilating systems, elevators, and similar equipment normally installed as part of the building construction.
(c) “Completed” means the building, structure or addition is ready for its intended use or occupancy.
(d) “In the process of construction” means that construction of the new building, structure or addition has begun, but is not yet completed, and typically the foundation is partially or wholly laid. Site preparation or demolition of an existing building or structure is not considered part of the construction process.
(e) “In use or occupancy” means the property is being utilized in the manner for which the completed building, structure or addition was intended.
(f) “Land” means land in its natural state and includes site development such as fill, excavation, grading and leveling.
(g) “Machinery or equipment” includes machinery or equipment housed within the building, structure or addition for the purpose of manufacturing or otherwise processing raw or finished materials.
(h) “Modernization” means to take corrective measures to bring a property into conformity with changes in style.
(i) “Structure” means all real property improvements, other than buildings, and includes improvements such as ramps, loading docks, wharfs, and paved areas used for parking or storage.
(j) “Testing" means a limited trial production run as a check of equipment and system performance, but does not include the processing of a substantial quantity of finished and marketable products that are, or can be, sold through the usual channels of trade.
(2) Property eligible for exemption:
(a) New building, structure or addition to an existing building or structure that is in the process of construction on January 1 of each assessment year in which exemption is claimed. The building, structure or addition must be intended primarily for the furtherance of the production of income, whether from a one-time sale of property or an ongoing stream of income. For example, a new condominium project being constructed for future sale to purchasers, who may live on the property or rent the property to others, will qualify for exemption.
(b) Machinery or equipment located at the construction site or installed in or affixed to a building, structure or addition. Testing of equipment is allowable during the period of construction.
(c) All personal property that would qualify as real property under OAR 150-307.010(1) that is situated at the place of construction on January 1 of each assessment year in which exemption is claimed.
(3) Manufacturing facilities may claim exemption for no more than two consecutive years. Conditions for exemption must exist on January 1 of each assessment year in which exemption is claimed.
(4) Property not eligible for exemption:
(a) Land.
(b) Modernization of an existing building or structure.
(c) Heating equipment, elevators, ventilating systems and similar equipment installed in a building after its original construction.
(d) Property constructed for residential occupancy by the owner.
(e) Nonmanufacturing facilities, of any kind, completed less than one year from the date construction began.
(5) No exemption may be allowed if use or occupancy is made of the building, structure or addition, or any part thereof, on or before January 1 of any assessment year in which exemption is claimed.
(a) If the building, structure or addition is completed and ready for use or occupancy on January 1, although not in use, it is taxable.
(b) If the building, structure or addition is completed and leased on January 1, but not occupied by the lessee, it is taxable.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.330
Hist.: 11-59. 11-61; 7-64; 1-66; 12-66; 3-70; 11-71; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; RD 9-1997, f. & cert. ef. 12-31-97; REV 11-2009, f. 12-21-09, cert. ef. 1-1-10
150-307.370
War Veterans Filing a Claim for Exemption if Living in a Nonprofit Home for the Elderly
(1) Residents of nonprofit homes for the elderly established under ORS 307.370 to 307.385, and 308.490, and who are otherwise qualified, are entitled to the war veteran's tax exemptions. Each veteran or surviving spouse qualifying for the exemption under ORS 307.250 shall file a claim with the county assessor on or before April 1 of each year the exemption is claimed. When the veteran or surviving spouse moves into the nonprofit home for the elderly after March 1 and before July 1 of any year, then the claim must be filed within 30 days after the veteran or surviving spouse moves into the nonprofit home for the elderly.
(2) Each nonprofit home for the elderly corporation annually shall aid qualifying residents in applying for the property tax exemptions on behalf of the corporation, for the benefit of the war veteran or surviving spouse as provided by ORS 307.370 to ORS 307.385, and 308.490. The application shall be on duplicate forms and shall be completed and signed by the resident-applicant, and filed with the assessor on or before the date required by law.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.370
Hist.: RD 11-1990, f. 12-20-90, cert. ef. 12-31-90; RD 1-1995, f. 12-29-95, cert. ef. 12-31-95
150-307.375
Nonprofit Home for the Elderly
The corporation must be nonprofit in nature and organized to furnish facilities primarily for citizens over 62 years of age.
(1) At least 95 percent of the corporation's gross operating income must come from payments for living, medical, recreation, and social services for persons over 62 years of age using the facilities.
(2) No part of the net earnings of the corporation can be used to benefit any stockholder or individual.
(3) Upon dissolution, the assets remaining after satisfying all lawful debts and liabilities shall be distributed to one or more corporations exempt from taxation under ORS Chapter 307 or to the state of Oregon. These corporations receiving the assets upon dissolution shall be organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes in ORS Chapter 307.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.375
Hist.: RD 6-1993, f. 12-30-93, cert. ef. 12-31-93; REV 4-2002, f. & cert. ef. 7-29-02, Renumbered from 150-370.370(A)
150-307.394
Personal Property Used for Placing Farm Crops in Storage
(1) Definitions:
(a) "Storage of farm crops" refers to the holding area in which a product is placed before processing begins.
(b) "Processing" is altering the crop in any way such as: washing, icing, sorting, grading, waxing, boxing, slicing, or cutting.
(c) "Primary" is the leading use or the use involving the highest percentage of time relative to all the various uses.
Example: If an unlicensed farm vehicle is used 45 percent of the time to move cleaned, sorted, washed and bagged carrots ready for market (PRODUCT); 30 percent of the time to move freshly-picked carrots from the field to the warehouse or cold storage facility; and 25 percent of the time sitting idle, then the vehicle is used primarily in a nonexempt status and is fully assessable, even though that use is not 50 percent or more of the time available.
(2) Machinery and equipment used to place a farm crop in storage are exempt from taxation. However, once processing of the crop is begun, it is no longer a crop, but a product. When the same machinery and equipment are used for both placing in storage and processing the primary use is what determines its assessment status.
Example: Apples are picked and go directly into cold storage. This would be considered "placing in storage of farm crops." When these same apples are sorted, washed or boxed it becomes a product and placing back into cold storage until sold is not considered "placing in storage of a farm crops." At this point apples change from a crop to a product.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.400
Hist.: RD 8-1992, f. 12-29-92, cert. ef. 12-31-92; REV 4-2002, f. & cert. ef. 7-29-02, Renumbered from 150-370.400
150-307.397
Hoop Houses
(1) Frost control systems include structures used to protect plants from extreme cold and use passive solar gain as their heat source.
(2) An example of a qualifying structure is a hoop house which:
(a) Has polyethylene sheeting and arched pipe rafters and wind bracing; and
(b) Has no heating system other than solar gain; and
(c) Is used for frost control; and which may
(d) Use a sprinkling system to assist frost control.
(3) An example of a structure that would not qualify as a frost control system is a hoop house which:
(a) Has polyethylene sheeting and arched pipe rafters and wind bracing; and
(b) Has a permanent heat source or climate control system.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 150-307.400
Hist.: RD 5-1996, f. 12-23-96, cert. ef. 12-31-96; REV 4-2002, f. & cert. ef. 7-29-02, Renumbered from 150-370.400(5)(a)
150-307.405
Pollution Control Facilities
Certified pollution control facilities meeting the requirements of ORS 468.165 and 468.170, are exempt from advalorem taxes to the extent of the highest percentage figure certified by the Environmental Quality Commission. This percentage is then applied to the amount of value the certified pollution control facilities contribute to the total property value. The value contribution of the pollution control facility can differ from its original cost because of inflation, depreciation, obsolescence, or other economic factors. Whenever the property is reappraised the value contribution of the certified pollution control facility shall be identified in the conclusion of value. The annual value changes will be recorded by the appraiser on county Form 310-089.
[Forms: The forms referred to in this rule are available from the agency.]
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.405
Hist.: RD 8-1988, f. 12-19-88, cert. ef. 12-31-88
150-307.405(3)
Pollution Control Exemption Expiration Dates
The number of years certified pollution control facilities are exempt from ad valorem property taxes depends on the completion date of the facility. The term of the exemption shall begin in the year of certification. [Table not included. See ED. NOTE.]
(1) Facility must be certified prior to December 31, 1982.
(2) For 1983 and after advalorem exemption is available only to nonprofit corporations and cooperatives.
[ED. NOTE: The Table referenced in this rule is not printed in the OAR Compilation. Copies are available from the agency.]
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.405
Hist.: RD 8-1988, f. 12-19-88, cert. ef. 12-31-88; RD 8-1992, f. 12-29-92, cert. ef. 12-31-92
150-307.455
Oregon Food Processor Property Tax Exemption
PURPOSE: The Oregon Department of Revenue (DOR) and the Oregon Department of Agriculture (ODA) may adopt rules to implement the provisions of ORS 307.455 and 307.457. 307.455 defines the eligibility requirements for exempt food processing machinery and equipment (M&E). This rule is intended to ensure that both agencies interpret and apply ORS 307.455 and 307.457 in a consistent manner; to clarify the meaning of terms used in ORS 307.455; and to explain the process through which a food processor may receive the exemption provided by ORS 307.455.
(1) Definitions:
(a) “Assessor” means the county assessor, or DOR, if DOR is responsible for the appraisal of the facility under ORS 306.126.
(b) “Certified” means that ODA has inspected the qualified M&E and has provided written verification to the food processor that the M&E is eligible for exemption under ORS 307.455.
(c) "Newly acquired" means new or used M&E that is first purchased or leased by a food processor not more than two years (24 months) prior to placing it into service. Leased equipment may be exempt only if the food processor is responsible for the payment of the property taxes under the terms of the lease agreement. Newly acquired property does not include existing equipment that has been refurbished or reconditioned in the time frame provided by this rule.
(d) "Placed into service" means the date the M&E is first used or in such condition that it is readily available and operational for its intended commercial use. It does not include property that is being tested or is in the process of being erected or installed on the January 1 assessment date.
(e) “Qualified M&E” means property, whether new or used, that is newly acquired by a food processor and placed into service prior to January 1 preceding the first tax year for which an exemption under this section is sought, and that consists of:
(A) Real property M&E that is used by a food processor in the primary processing of raw or fresh fruit, vegetables, nuts, legumes, or seafood; or
(B) Personal property M&E that is used in an integrated processing line for the primary processing of raw or fresh fruit, vegetables, nuts, legumes, or seafood.
(f) “Real Market Value (RMV)” of the property, for the purpose of determining the late filing fee pursuant to ORS 307.455, means the invoice cost of the qualified M&E , installation, engineering, and all miscellaneous costs including machinery process piping, foundations, power wiring, interest during installation, and freight.
(2) A food processor seeking an exemption under ORS 307.455 must make a request to ODA for certification. The request must:
(a) Be made in writing on a form provided by ODA;
(b) Include a listing on the Oregon Food Processor Certification of Qualified Machinery and Equipment form provided by DOR of all qualified M&E for which certification is sought;
(c) Be made at any time after M&E becomes “qualified M&E” and
(d) Be postmarked by February 1 of the assessment year during which the exemption is claimed. If the request is made after February 1, ODA will not guarantee that certification will be completed prior to the March 1 exemption claim filing deadline.
(3) Upon receiving the request for certification, the Food and Safety Division of ODA will:
(a) Schedule a site visit with the food processor;
(b) Inspect the M&E that is the subject of the listing submitted to ODA for which certification is sought;
(c) Determine if the subject M&E constitutes qualified M&E; and
(d) Provide written certification to the food processor approving or denying the subject M&E as qualified and eligible for exemption. The written certification is provided by ODA on the listing of qualified M&E submitted by the food processor.
(e) Denial of certification of certain property by the Oregon Department of Agriculture is a contested case for the purpose of ORS Chapter 183.
(4) Following the certification process, the food processor must file an exemption claim form with the assessor. The claim must:
(a) Be filed on a completed Oregon Food Processor Exemption Claim form provided by DOR;
(b) Include the written certification signed and dated by ODA; and
(c) Be filed by March 1, except as provided by section 9 of this rule.
(5) The filing of an exemption claim form is separate from the filing of a property tax return.
(6) Approved extensions for filing property tax returns do not apply to filing the exemption claim form.
(7) The assessor will return any exemption claim form not meeting the requirements of subsection 4(a) and (b) of this rule to the food processor.
(8) If the assessor returns an exemption claim form for completion, the food processor must return the exemption claim form to the assessor by March 1 for the claim to be considered as timely filed.
(9) An exemption claim form that is filed after March 1, and on or before December 31 of the assessment year during which the exemption is claimed, must be accompanied by a late filing fee pursuant to ORS 307.455(2)(b). If the late filing fee is not included with the claim form, no exemption will be allowed.
(a) The late filing fee is the greater of $200 or one-tenth of one percent of RMV of the property that is the subject of the claim form.
(b) The certified listing required by subsection 4(b) of this rule that is included with a late filed exemption claim must show the RMV of each piece of qualified M&E. The RMV is reported on the certified listing form, as directed by that form’s instructions.
(c) Denial of the exemption may be appealed to the Oregon Tax Court pursuant to 305.275.
(10) Upon the assessor’s receipt of a completed exemption claim form, and late filing fee if applicable, the assessor will compare the certified listing of all qualified M&E with the schedule of real and personal property M&E included on the property tax return. The property tax return must clearly identify the M&E that has been certified as eligible for exemption by ODA.
(11) Eligible M&E is exempt for the first qualifying tax year and the following four tax years as long as it continues to qualify as of January 1 of each year.
(a) The food processor must notify the assessor if any of the exempt M&E becomes ineligible for the exemption. Property becomes ineligible when it no longer constitutes “qualified M&E” as defined in this rule.
(b) The assessor may require verification of the M&E’s continued qualification for exemption.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 305.100, 307.459
Stats. Implemented: ORS 307.455
Hist.: REV 17-2008, f. 12-26-08, cert. ef. 1-1-09
150-307.475
Hardship Situations
(1) "Exemption" includes total exemptions,
partial exemptions, and special assessments including, but not limited to, those
listed in ORS 308A.706(1)(d). Relief under this section does not apply to the provisions
of ORS 311.666 to 311.735.
(2) "Good and sufficient
cause" is an extraordinary circumstance beyond the control of the taxpayer or the
taxpayer's agent or representative that causes the taxpayer to file a late application
for an exemption, cancellation of tax, or redetermination of value pursuant to ORS
308.146(6) or 308.428 with the assessor or local governing body.
(a) Extraordinary circumstances
include, but are not limited to:
(A) Illness, absence, or
disability that substantially impairs a taxpayer's ability to make a timely application.
The substantial impairment must have existed prior to the filing deadline, and must
have been of such a nature that a reasonable and prudent taxpayer could not have
been expected to conform to the deadline.
(B) Delayed receipt of a
disability certification, a death certificate, or other documentary justification
necessary for the filing of an application for exemption, cancellation of tax, or
redetermination of value, unless the taxpayer, with ordinary prudence, could have
obtained the required information in a timely manner.
(C) Reasonable reliance on
misinformation provided by county assessment and taxation staff or Department of
Revenue personnel.
(D) Active duty military
service during the tax year for which the application for the exemption was filed
but only when the petitioner has applied and otherwise qualified for the exemption
under ORS 307.286. The department may not recommend the assessor accept a late filed
application for the exemption due to this circumstance unless the petition to the
department is filed timely or the deadline for filing a petition with the department
is extended under section (4) of this rule.
(b) If none of the other
extraordinary circumstances described in subsection (2)(a) of this rule apply, the
department cannot find that good and sufficient cause exists if the late filing
is due to:
(A) The taxpayer's inadvertence,
oversight, or lack of knowledge regarding the filing requirements.
(B) Financial hardship.
(C) Reliance on misinformation
provided by a professional such as a real estate broker, attorney, or CPA.
(3) "Military service," as
used in section (4) of this rule, includes the period of time that National Guard
members are called into federal service for more than 30 days under 32 USC 502(f),
as well as the time that members of the Army, Air Force, Navy, Marine Corps, or
Coast Guard, and military reservists are ordered to report to active duty.
(4) Notwithstanding ORS 307.475(3),
the Servicemembers' Civil Relief Act (SCRA), 50 USC app. 526, suspends the deadline
for filing a petition for hardship relief during the period that a service member
is in active duty military service with the armed forces.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.475
Hist.: RD 8-1983, f. 12-20-83,
cert. ef. 12-31-83; RD 9-1984, f. 12-5-84, cert. ef. 12-31-84; REV 4-2006, f. &
cert. ef. 7-31-06; REV 4-2007, f. 7-30-07, cert. ef. 7-31-07; REV 3-2014,
f. & cert. ef. 7-31-14
150-307.480
Farm Labor Camp Assessment
Only the portion of the farm labor camp property actually occupied, or held for occupation, by persons primarily employed for agricultural or horticultural purposes would qualify. Land and improvements which are not an integral part of the farm labor camp shall not qualify for the exemption. Examples of areas which may qualify for exemption are:
(1) Cooking and eating areas.
(2) Parking areas.
(3) Buffer areas, when reasonably necessary to protect the labor camp or to protect surrounding area from noise or other nuisance factors.
(4) Recreation areas.
Stat. Auth.:ORS 305.100
Stats. Implemented: ORS 307.480
Hist.: RD 9-1989, f. 12-18-89, cert. ef. 12-31-89
150-307.495
Filing a Claim for Exemption When a Farm Labor Camp or Child Care Facility is Acquired
(1) Each nonprofit corporation claiming exemption under ORS 307.485 shall file a claim with the county assessor on or before April 1 of each assessment year for which the exemption is claimed.
(2) Each nonprofit corporation claiming exemption under ORS 307.485 that acquires property after March 1 and before July 1 shall file a claim with the county assessor within 30 days after acquisition.
(3) For existing farm labor camps or child care facilities, “acquisition” occurs when:
(a) The nonprofit corporation takes ownership of the property; or
(b) The nonprofit corporation, who is operating the camp or facility, enters into a lease or lease-purchase agreement.
(4) For unimproved property, “acquisition” occurs when:
(a) The new improvements for the farm labor camp or child care facility are completed and have been issued a temporary or permanent certificate of occupancy; or
(b) If no certificate is required, is ready for occupancy.
(5) When the claim for exemption is filed, the farm labor camp or child care facility must qualify as being “eligible” within the definitions of ORS 307.480(1) and (2) and must be in compliance with the required health and fire codes for farm labor camps or is a certified child care facility.
(6) Acquisition must occur before July 1 of the assessment year for which the exemption is claimed.
(a) If the farm labor camp or child care facility property qualifies before July 1, the property may be eligible for exemption for the ensuing tax year.
(b) If acquisition does not occur before July 1, or if the property does not meet other statutory requirements for a camp or facility before July 1, the property will not be eligible for the exemption for the ensuing tax year.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.495
Hist.: REV 7-2008, f. 8-29-08, cert. ef. 8-31-08
150-307.547
Certification of Nonprofit Corporation Low Income Housing Exemption to County Assessor
If the governing body determines under
ORS 307.547 that property qualifies for exemption from taxation, the governing body
must certify the exemption to the county assessor:
(1) On or before April 1
preceding the tax year for which exemption is granted, or
(2) If after April 1, within
one week of the governing body determining the property qualifies for exemption.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.547
Hist.: REV 11-2009, f. 12-21-09,
cert. ef. 1-1-10; REV 3-2014, f. & cert. ef. 7-31-14
150-307.804
Rural Health Care Facilities
(1) Definitions:
(a) "Health care provider" has the meaning given that term as defined in ORS 127.505(11).
(b) "Medical care" has the same meaning as "health care services" as defined in ORS 750.005(5) and it must be provided by a health care provider.
(2) To qualify for the property tax exemption under ORS 307.804, the rural health care facility must be used exclusively to provide medical care.
(3) The following examples are types of facilities that do not provide medical care exclusively, and therefore do not qualify for the exemption provided in ORS 307.804. These include but are not limited to:
(a) Athletic clubs as defined in OAR 333-060-0015;
(b) Long term care facilities as defined in ORS 442.015(22);
(c) Nursing homes;
(d) Group homes; or
(e) Drug or alcohol treatment facilities.
(4) Real and personal property of a rural health care facility qualifying for exemption under ORS 307.804 includes:
(a) Real and personal property located at a rural health care facility and used exclusively to provide the medical care. The property may be owned by an entity other than the owner of the facility.
(b) Real and personal property equipment located at a rural health care facility and used exclusively to provide the medical care. The property may be owned by an entity other than the owner of the facility.
(5) The owner of the rural health care facility must file annually with the county assessor to receive the exemption.
(6) The owner of the rural health care facility may file on behalf of other persons whose property is located at the facility and used exclusively to provide medical care.
Stat. Auth.: 305.100
Stat. Implemented: 307.804
Hist.: REV 1-2003, f. & cert. ef. 7-31-03; REV 7-2008, f. 8-29-08, cert. ef. 8-31-08
150-307.811(1)
Definitions
The word "solely" in ORS 307.811(1), is interpreted to mean that the potentially exempt property, real or personal, is being used exclusively in the operations of a long term care facility, including personal, common and auxiliary support areas and property related to such operations. Example: The exemption may include the bedroom and bathroom, common areas and kitchen and storage areas and other property, provided that such property is used only in the operations of the facility.
Stat. Auth.:ORS 305.100
Stats. Implemented: ORS 307.811
Hist.: REV 8-2000, f. & cert. ef. 8-3-00
150-307.811(2)(a)
Filing Requirements
(1) For the facility to obtain the long term care facility exemption, the following documentation must be filed with the county assessor's office:
(a) A copy of the certification of qualification for exemption for the tax year for which exemption is sought issued by Senior and Disabled Services Division (SDSD) and Mental Health and Disability Services Division.
(b) A copy of the appropriate resolution or ordinance from each taxing district adopting the provisions of ORS 307.811. Such an ordinance or resolution would read substantially equivalent to the following: The provisions of ORS 307.811 are adopted for the purpose of allowing real and personal property or eligible long term care facilities to be exempt from ad volorem property taxation within this taxing district.
(2) To avoid the late filing penalty, the certification of qualification for exemption accompanied by the resolution of ordinance must be filed on or before April 1 of the year preceding the tax year for which the exemption is being claimed. After April 1 and on or before December 31 of the tax year, the taxpayer may file a certification of qualification for exemption accompanied by a copy of the resolution or ordinance. The filing must be accompanied by a late fee of the greater of $200 or one-tenth of one percent of the real market value of the property to which the certification of qualification for exemption applies.
Stat. Auth.:ORS 305.100
Stats. Implemented: ORS 307.811
Hist.: REV 8-2000, f. & cert. ef. 8-3-00
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