OAR 150-308-0260
Industrial Property Valuation for Tax Purposes

(1)

For the purposes of this rule, the following words and phrases have the following meaning:

(a)

A “unit of property” is the item, structure, plant, or integrated complex as it physically exists on the assessment date.

(b)

“Real property” means the real estate (physical land and appurtenances including structures, and machinery and equipment erected upon the land or attached to the land or structures) and all interests, benefits, and rights inherent in the ownership of the physical real estate.

(c)

“Highest and best use” means the reasonably probable use of vacant land or an improved property that is legally permissible, physically possible, financially feasible, and maximally productive, which results in the highest real market value.

(2)

If the highest and best use of the unit of property is an operating plant or an operating integrated complex, the real market value will be considered to be a “going concern.” The going concern concept recognizes that the value of an assembled and operational group of assets usually exceeds the value of an identical group of assets that are separate or not operational.

(3)

Methods and Procedures for Determining the Real Market Value of Industrial Property:

(a)

For the valuation of industrial property all three approaches to value (sales comparison, cost, and income), must be considered. For a particular property, it may be that all three approaches cannot be applied, however, each must be investigated for its merit in each specific appraisal.

(b)

The market value of a unit of property must not be determined from the market price of its component parts, such as wood, glass, concrete, furnaces, elevators, machines, conveyors, etc., each priced separately as an item of property, without regard to its being integrated into the total unit.

(c)

In utilizing the sales comparison approach only actual market transactions of property comparable to the subject, or adjusted to be comparable, will be used. All transactions utilized in the sales comparison approach must be verified to ensure they reflect arms-length transactions. When non-typical market conditions of sale are involved in a transaction (duress, death, foreclosure, bankruptcy, liquidation, interrelated corporations or persons, etc.) the transaction will not be used in the sales comparison approach unless market-based adjustments can be made for the non-typical market condition.

(A)

Properties utilized in the sales comparison approach, although not necessarily identical, at the very least must be similar in many respects. Adjustments must be made for differences in location, product, production capacity, and all other factors that may affect value. Excessively large adjustments or an excessive number of adjustments is an indication that the properties are not comparable.

(B)

When utilizing the sales comparison approach, the appraiser must take into consideration difference between the subject and the comparable properties for physical condition, functional obsolescence and economic obsolescence. Adjustments must be made for differences between the subject and comparable properties for factors such as physical condition, functional deficiencies, operating efficiency, and economic obsolescence. If the properties are functionally or economically equivalent, verification of the equivalency must be included in the appraisal.

(f)

Sales for the disposal of properties through auction, liquidation or scrap sales are indicators of market value only when on the assessment date such disposal of the subject property is imminent, or has actually taken place.

(g)

The cost approach may utilize either the reproduction, replacement, or the used equipment technique. It is acceptable to use trended historical cost to estimate the reproduction cost new. The value estimate must include all costs required to assemble and construct the unit of property.

(h)

When using the income approach, the income from the operation of the property may be utilized for industrial properties and other properties that are not typically leased or rented. When the income from the property’s operation is used, the unit of property must be valued as a going concern. In utilizing the income approach for the valuation of industrial properties, the discounted cash flow technique is one of the appropriate methods to derive a value estimate. Consideration in the discounted cash flow technique is given to items such as the anticipated future free cash flow available to both, the debt and equity holders; inventory valuation methods, intangible assets, income taxes, net working capital, capital reinvestment, etc. When utilizing the discounted cash flow technique, the capitalization or discount rate must be derived in accordance with OAR 150-308-0250 (Derivation of Capital Structure and Discount Rates for Valuing Industrial Properties and Department-Assessed Properties).

(i)

Determining the highest and best use for the unit of property is necessary for establishing real market value. This determination of highest and best use may include, among others, all possible uses that might result from retaining, altering or ceasing the integrated nature of the unit of property.

(4)

For machinery and equipment, in all the approaches to value, if the highest and best use is continued operation, adjustments must be made to account for the cost of integrating the machinery and equipment into the total unit of the property. These costs include, but are not limited to, freight, installation, wiring, piping and foundation costs.

(5)

Basic information for an appraisal. Basic data and procedures in making appraisals normally include the following when applicable:

(a)

Location of property by tax codes and tax lot numbers;

(b)

Map or sketch of land owned and layout of plant;

(c)

Inventory of physical plant;

(d)

Reproduction or replacement cost computations, as applicable;

(e)

Analysis of depreciation;

(f)

Analysis of economics as they affect valuation;

(g)

Analysis of sales data, when applicable;

(h)

Field inspection;

(i)

Research and familiarization with typical properties of the industry;

(j)

Annual reports to stockholders;

(k)

Fixed assets schedules;

(L)

Income statements;

(m)

Such other data that may affect value.

(6)

Basic information for an appraisal utilizing the industrial property return. Basic data for an appraisal utilizing the industrial property return normally includes the following:

(a)

Report of additions;

(b)

Report of retirements;

(c)

Knowledge of miscellaneous technical and economic conditions that affect value;

(d)

Trending factors:

(A)

Separate factors for yard improvements, buildings, and equipment classified as real property must be developed.

(B)

The development of the factors must use data published by the United States Department of Labor, the Oregon Building Construction Trades Council, and other sources the Department of Revenue deems to be reliable indicators of property value over time.

(C)

Data developed by physical inspection together with appraising a segment of the total property or making a general review of the total value under certain circumstances may supplement the data utilized in (A) above.

(e)

Depreciation allowances;

(f)

Real market value for prior year.

(7)

This rule is effective January 1, 2016.

Source: Rule 150-308-0260 — Industrial Property Valuation for Tax Purposes, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-308-0260.

150‑308‑0010
Continuing Education Requirements for Registered Appraisers, Waiver of those Requirements, and Revocation of Registrations 150‑308‑0020
Revocation of Appraiser Registration 150‑308‑0030
Appraiser Trainee Program 150‑308‑0040
Standards for Imposition, Waiver, and Reduction of Penalty on Utilities and Designated Companies Assessed by the Department. Imposition of Penalty for Failure to File a Timely or Complete Return 150‑308‑0050
Continuing Education Requirements for Assessors 150‑308‑0060
Continuing Education Requirement for Appraisal Managers in County Assessment Offices 150‑308‑0070
Qualifications of Managerial Employees of the Assessor’s Office 150‑308‑0080
Taxable Personal Property Whose Temporary Situs Is in the State of Oregon 150‑308‑0090
Billboards as Real Property 150‑308‑0100
Determining Maximum Assessed Value when the Property Class is Changed 150‑308‑0110
Reduction of Maximum Assessed Value (MAV) for Property Destroyed or Damaged by Fire or Act of God 150‑308‑0120
Reduction of Maximum Assessed Value (MAV) When a Building is Demolished or Removed 150‑308‑0130
Definitions 150‑308‑0140
Computation of Changed Property Ratio for Centrally Assessed Property 150‑308‑0150
Net Capitalized Additions 150‑308‑0160
Minor Construction 150‑308‑0170
Establishing a Changed Property Ratio 150‑308‑0180
Definition of Affected 150‑308‑0190
Subdivided and Partitioned Property MAV 150‑308‑0200
Rezoned Property — Calculating Maximum Assessed Value (MAV) 150‑308‑0210
Omitted Property—Allocating Maximum Assessed Value (MAV) 150‑308‑0220
Exemption, Partial Exemption or Special Assessment Disqualification — Allocating MAV 150‑308‑0230
Calculation of Maximum Assessed Value (MAV) for Lot Line Adjustments 150‑308‑0240
Real Property Valuation for Tax Purposes 150‑308‑0245
Partial Exemptions and Special Assessments of Land 150‑308‑0250
Derivation of Capital Structure and Discount Rates for Valuing Industrial Properties and Department-Assessed Properties 150‑308‑0260
Industrial Property Valuation for Tax Purposes 150‑308‑0270
Valuation of Contaminated Property 150‑308‑0280
Measuring Functional Obsolescence in Industrial Property 150‑308‑0290
Effective Tax Rate 150‑308‑0300
Valuation Review of State-appraised Industrial Property. 150‑308‑0310
Real Market Value and Property Classification as Part of Assessment Roll 150‑308‑0320
Property With Multiple Leases Assessed as One Parcel 150‑308‑0330
Contents of Assessment Roll for Condominiums 150‑308‑0340
Printout or Microfiche Required When Assessment and Tax Rolls do not Constitute a Written Record 150‑308‑0350
Filing Requirements for Certain Delayed Annexations by Cities 150‑308‑0355
Filing Requirements for Boundary Changes 150‑308‑0360
Appraisals of Real Property by Registered Appraisers 150‑308‑0370
Determining Taxable Value for Assessment Charges on Property Exempt from Taxation 150‑308‑0380
Appraisal of Real Property 150‑308‑0390
Agricultural Land Devoted to Agricultural Purposes 150‑308‑0400
Stipulation Procedures 150‑308‑0410
Cancellation of Personal Property Assessments 150‑308‑0420
Exemption of Watercraft Undergoing Repairs 150‑308‑0430
Valuation of New Construction 150‑308‑0440
Confidentiality — Returns of Taxable Property 150‑308‑0450
Industrial Property Returns — Incomplete Returns and Late Filing Penalties 150‑308‑0470
County Contractors Having Access to Confidential Records 150‑308‑0480
Confidentiality of Property Tax Information for Centrally Assessed Companies 150‑308‑0490
Appraisal and Valuation of Industrial Plants 150‑308‑0500
Confidentiality of Industrial Plant Information 150‑308‑0510
Definition of Destroyed or Damaged 150‑308‑0520
Valuation of Nonprofit Homes for the Elderly 150‑308‑0530
Defining “Communication Services” 150‑308‑0540
Assessment of Properties of Designated Utilities and Companies by Department of Revenue 150‑308‑0550
Property Used for Guide Service 150‑308‑0560
Confidentiality of Appraisals of Designated Utilities and Companies by Department of Revenue 150‑308‑0570
Computation of Changed Property Ratio for Centrally Assessed Property 150‑308‑0580
Allocation of Mobile Aircraft Property Value 150‑308‑0585
Procedure for Determining Oregon Property Value for Private Railroad Car Companies 150‑308‑0590
Allocation of Centrally Assessed Electric Company Property Value 150‑308‑0595
Allocation of Centrally Assessed Gas Distribution Company Property Value 150‑308‑0600
Allocation of Centrally Assessed Pipeline Company Property Value 150‑308‑0605
Allocation of Centrally Assessed Railroad Company Property Value 150‑308‑0610
Allocation of Centrally Assessed Communication Company Property Value 150‑308‑0615
Allocation of Centrally Assessed Water Transportation Company Property Value 150‑308‑0660
Unit Valuation of Centrally Assessed Properties 150‑308‑0670
Contents of the Utility Assessment Roll 150‑308‑0680
Contents of Department’s Journal 150‑308‑0690
Centrally Assessed Property — Appraisal Guidelines 150‑308‑0695
Removal of Certain Elected Exempt Property from Correlated System Real Market Value of Centrally Assessed Property 150‑308‑0700
Qualification of Property for Special Assessment as Government Restricted Multiunit Rental Housing 150‑308‑0710
Application and Election Process for Government Restricted Multiunit Rental Housing 150‑308‑0720
Special Assessment of Government Restricted Multiunit Rental Housing Property 150‑308‑0730
Special Assessment Disqualification Process 150‑308‑0740
Process for Voluntary Disqualification from Special Assessment Program and Subsequent Application 150‑308‑0750
Payment of Taxes on Manufactured Structure That Allows Change from Real Property to Personal Property Status 150‑308‑0760
Manufactured Structure Classified as Real or Personal Property 150‑308‑0770
Real and Personal Manufactured Dwellings to be Assessed in Like Manner 150‑308‑1010
Farm Use Definitions, Inactivity Due to Illness, and Description of Lands in Non-Exclusive Farm Use 150‑308‑1020
Disposal by donation to a local food bank or school 150‑308‑1030
Assessment of Farmlands Within Exclusive Farm Use (EFU) Zones 150‑308‑1040
Assessment of Farmlands Outside of Exclusive Farm Use (EFU) Zones 150‑308‑1050
Gross Income Requirement 150‑308‑1060
Wasteland 150‑308‑1070
Acquired Land as Part of Farming Unit 150‑308‑1080
Valuation of Certain Agricultural Land to Reflect Value for Farm Use Only 150‑308‑1090
Calculation of MSAV When SAV Soil Classification is Changed 150‑308‑1100
Disqualification of Exclusive Farm Use Farmland 150‑308‑1110
Disqualification of Non-Exclusive Farm Use (Non-EFU) Farmland 150‑308‑1120
Definition of Specially Assessed Homesites 150‑308‑1130
Application for Specially Assessed Homesite 150‑308‑1140
Qualified Specially Assessed Homesite Valuation 150‑308‑1150
Ratio Calculation for Open Space Lands 150‑308‑1500
Additional Tax Calculation and When to Impose Additional Tax 150‑308‑1510
No Additional Tax 150‑308‑1520
Deferred Additional Tax (ORS 308A.706) 150‑308‑1530
Disqualification Notification Procedures
Last Updated

Jun. 8, 2021

Rule 150-308-0260’s source at or​.us