Oregon
Rule Rule 123-674-6000
FILING & COMPLIANCE — Exemption Prior To ‘In Service’


Under ORS 285C.170 (Construction-in-process exemption) qualified property of an actively authorized business firm in the enterprise zone is exempt from ad valorem taxation for up to two years, such that:

(1)

Consistent with OAR 123-674-6100 (Mandatory First-year Claim with Property Schedule)(4), this exemption precedes and complements the one under ORS 285C.175 (Enterprise zone exemption), in that:

(a)

It applies only to property that is not yet placed in service before the (January-1) assessment date; and

(b)

The property is thus not qualified to start the three- to five-year exemption period in the present assessment year.
(2) This exemption is largely interchangeable with the one under ORS 307.330 (Commercial facilities under construction) and 307.340 (Filing proof for cancellation of assessment) (Commercial Facilities Under Construction) according to OAR 150-307-0430 (Exemption of Buildings, Structures and Machinery or Equipment during Construction). Common elements are that:
(a) The firm must file with the county assessor, as described in section (3) of this rule, no later than April 1 of each assessment year when the property exists in the zone/county;
(b) Any (utility) property subject to central assessment by the Department of Revenue is disallowed;
(c) Exemption is permissible for not more than two consecutive years; and
(d) The relationship to ORS 285C.175 (Enterprise zone exemption) as described in section (1) of this rule is the same in terms of the property being in service or not.
(3)(a) The firm shall file the latest revision of Department of Revenue Form OR-AP-CIPEZ, 150-310-021, Application for Construction-in-Process Enterprise Zone Exemption. This is required even if the firm is also filing under ORS 285C.220 (Exemption claims) and 285C.225 (Sponsor’s addendum) to claim an exemption under ORS 285C.175 (Enterprise zone exemption) pursuant to the same authorization on other qualified property already in service.
(b) An eligible business firm that instead files Form OR-AP-CACFC, 150-310-020, Application for Cancellation of Assessment on Commercial Facilities Under Construction, will receive only the treatment allowed under ORS 307.330 (Commercial facilities under construction), but it needs to do so for situations described in section (5) and (6) of this rule.
(4) The following may be exempt in the zone, but would not be under ORS 307.330 (Commercial facilities under construction):
(a) Property at a project site where there is no construction of or additions to a building or structure;
(b) Mere modifications to a building or structure;
(c) A nonmanufacturing facility with re/construction taking less than a year’s time to complete and to put the facility in service;
(d) Additional property that is not yet placed in service, even though a portion or element of the project, facility or structure has been completed, consistent with OAR 123-674-5300 (Buildings, Structures and Other Real Property)(2), as addressed in subsection (3)(a) of this rule; or
(e) Machinery and equipment, even if it will:
(A) Not be installed in or affixed to a building, structure or addition thereto; or
(B) Remain personal property after installation.
(5) Irrespective that property might qualify under ORS 285C.175 (Enterprise zone exemption), an eligible business firm may not use this exemption if, for example:
(a) The property had been exempt for the previous year at the same site in the zone under ORS 307.330 (Commercial facilities under construction), for whatever reason;
(b) The firm is a hotel, motel or destination resort, regardless of the zone;
(c) As of the January 1 assessment date, the authorization is inactive under ORS 285C.165 (Extension of period of authorization) unless also renewed by April 1; or
(d) The firm’s Application is not yet approved (it is not authorized), consistent with OAR 123-674-3000 (AUTHORIZATION’S COVERAGE & EFFECT — Being An Authorized Firm) by the April-1 filing deadline in this rule.
(6) Pending approval of its Application, an eligible business firm may file and have property exempted as allowed under ORS 307.330 (Commercial facilities under construction), such that:
(a) After approval/authorization, the assessor may extend exemption under ORS 285C.170 (Construction-in-process exemption) to other qualified property subject to this rule; but
(b) The ongoing exemption of the property into the next year may continue only under ORS 307.330 (Commercial facilities under construction), as applicable.
(7) The county assessor shall not exempt property specifically under ORS 285C.170 (Construction-in-process exemption), if the assessor has a reasonable and definitive basis to believe that:
(a) The property is or will not be qualified property when placed in service;
(b) The authorized business firm will not qualify under ORS 285C.200 (Qualifications of business firm); or
(c) Any other applicable requirement under ORS 285C.175 (Enterprise zone exemption) will not be satisfied, including criteria in OAR 123-674-8000 (ZONE BEGINNINGS & ENDS — Designation or Amendment) to 123-674-8300 (Timely Completion of Construction).

(8)

In the face of significant doubts about conformance with the requirements of ORS 285C.170 (Construction-in-process exemption), the assessor may depend on reasonably requested information or confirmation from the firm or zone sponsor, before determining to the grant the exemption.

(9)

Consistent with subsection (2)(c) of this rule, property exempted under ORS 285C.170 (Construction-in-process exemption) may not receive further exemption under 307.330 (Commercial facilities under construction) beyond the cumulative two-year period.

(10)

In the event that the anticipated exemption under ORS 285C.175 (Enterprise zone exemption) is unclaimed under 285C.220 (Exemption claims), denied, or disqualified under 285C.240 (Disqualification), the exemption as described in this rule is not necessarily jeopardized in any way, even for such property that would not normally be exempt under 307.330 (Commercial facilities under construction).
Source
Last accessed
Nov. 25, 2020