Property Subject to Taxation

ORS 307.130
Property of certain museums, volunteer fire departments and literary, benevolent, charitable and scientific institutions

(1)

As used in this section:

(a)

“Art museum” means a nonprofit corporation organized to display works of art to the public.

(b)

“Nonprofit corporation” means a corporation that:

(A)

Is organized not for profit, pursuant to ORS chapter 65 or any predecessor of ORS chapter 65; or

(B)

Is organized and operated as described under section 501(c) of the Internal Revenue Code as defined in ORS 305.842 (Application of Internal Revenue Code to certain property tax laws).

(c)

“Rehabilitation facility” means a facility defined in ORS 344.710 (“Rehabilitation facility” defined for ORS 344) or a facility that provides individuals who have physical, mental or emotional disabilities with occupational rehabilitation activities of an educational or therapeutic nature, even if remuneration is received by the individual.

(d)

“Volunteer fire department” means a nonprofit corporation organized to provide fire protection services in a specific response area.

(e)

“Welfare program” means a program to provide food, shelter, clothing or health care, including dental service, to needy persons without charge.

(2)

Upon compliance with ORS 307.162 (Claiming exemption), the following property owned or being purchased by art museums, volunteer fire departments, or incorporated literary, benevolent, charitable and scientific institutions shall be exempt from taxation:

(a)

Except as provided in ORS 748.414 (Funds exempt from certain taxes), only real or personal property, or a proportion of the property, that is actually and exclusively occupied or used in the literary, benevolent, charitable or scientific work carried on by such institutions.

(b)

Parking lots used for parking or any other use as long as that parking or other use is permitted without charge for no fewer than 355 days during the tax year.

(c)

All real or personal property of a rehabilitation facility or any retail outlet of the facility, including inventory.

(d)

All real and personal property of a retail store dealing exclusively in donated inventory, if the inventory is distributed without cost as part of a welfare program or where the proceeds of the sale of any inventory sold to the general public are used to support a welfare program.

(e)

All real and personal property of a retail store if:

(A)

The retail store deals on a regular basis in inventory at least one-half of which is donated and consigned;

(B)

The individuals who operate the retail store are all individuals who work as volunteers; and

(C)

The inventory is either distributed without charge as part of a welfare program, or sold to the general public and the sales proceeds used exclusively to support a welfare program.

(f)

The real and personal property of an art museum that is used in conjunction with the public display of works of art or used to educate the public about art, but not including any portion of the art museum’s real or personal property that is used to sell, or hold out for sale, works of art, reproductions of works of art or other items to be sold to the public.

(g)

All real and personal property of a volunteer fire department that is used in conjunction with services and activities for providing fire protection to all residents within a fire response area.

(h)

All real and personal property, including inventory, of a retail store owned by a nonprofit corporation if:

(A)

The retail store deals exclusively in donated inventory; and

(B)

Proceeds of the retail store sales are used to support a not-for-profit housing program whose purpose is to:

(i)

Acquire property and construct housing for resale to individuals at or below the cost of acquisition and construction; and

(ii)

Provide loans bearing no interest to individuals purchasing housing through the program.

(i)

All real and personal property, including inventory, of a retail store owned by a nonprofit corporation if:

(A)

The retail store deals exclusively in donated inventory;

(B)

The retail store operates with substantial support from volunteers; and

(C)

All net proceeds of the retail store sales are donated:

(i)

To a nonprofit corporation that provides animal rescue services;

(ii)

To a manufacturer or provider of goods or services in return for which an entity described in sub-subparagraph (i) of this subparagraph receives an equivalent value of goods or services from the manufacturer or provider;

(iii)

To an entity that provides spaying and neutering services for pets of individuals residing in households with an annual household income at or below 80 percent of the area median income; or

(iv)

For the purpose of aiding domesticated animals, regardless of whether the animals are in the custody of the county shelter, in furtherance of the purpose for which the nonprofit corporation was organized.

(3)

An art museum or institution shall not be deprived of an exemption under this section solely because its primary source of funding is from one or more governmental entities.

(4)

An institution shall not be deprived of an exemption under this section because its purpose or the use of its property is not limited to relieving pain, alleviating disease or removing constraints. [Amended by 1955 c.576 §1; 1959 c.207 §1; 1969 c.342 §1; 1971 c.605 §1; 1974 c.52 §3; 1979 c.688 §1; 1987 c.391 §1; 1987 c.490 §49; 1989 c.224 §50; 1991 c.93 §4; 1993 c.655 §3; 1995 c.470 §4; 1997 c.599 §1; 1999 c.90 §31; 1999 c.773 §1; 2001 c.660 §26; 2003 c.77 §4; 2005 c.832 §16; 2007 c.70 §75; 2007 c.614 §4a; 2007 c.694 §1; 2008 c.45 §4; 2009 c.5 §14; 2009 c.909 §14; 2010 c.82 §14; 2011 c.7 §14; 2012 c.31 §14; 2013 c.377 §14; 2014 c.52 §16; 2015 c.701 §§46,48; 2017 c.686 §§1,2]
Note: Sections 1 and 2, chapter 7, Oregon Laws 2014, provide:
Sec. 1. (1) For purposes of ORS 307.130 (Property of certain museums, volunteer fire departments and literary, benevolent, charitable and scientific institutions) (2)(a), real or personal property of a nonprofit corporation is actually and exclusively occupied or used in the benevolent or charitable work carried on by the nonprofit corporation, and is exempt from ad valorem property taxation, if, for the tax year beginning on July 1, 2012, the property was actually:

(a)

Offered, occupied or used as low-income housing; and

(b)

Granted exemption under ORS 307.130 (Property of certain museums, volunteer fire departments and literary, benevolent, charitable and scientific institutions) (2)(a) by the county in which the property is located.

(2)

The exemption provided under subsection (1) of this section continues until the end of the earliest tax year in which the property described in subsection (1) of this section:

(a)

Is no longer actually offered, occupied or used as low-income housing;

(b)

Changes ownership other than by sale or transfer to a nonprofit corporation under whose ownership the property continues to be offered, occupied or used as low-income housing; or

(c)

Is leased in its entirety by the nonprofit corporation claiming the exemption, other than by leases for occupancy of individual units as low-income housing. [2014 c.7 §1]
Sec. 2. (1) Section 1, chapter 7, Oregon Laws 2014, applies to property tax years beginning on or after July 1, 2012.

(2)

The exemption provided under section 1, chapter 7, Oregon Laws 2014, may not be granted for tax years beginning on or after July 1, 2028. [2014 c.7 §2; 2016 c.40 §1; 2021 c.455 §1]

Notes of Decisions

Real property occupied or used

Actually occupied or used

A farm owned by a church, from which the profits flowed to the benefit of the church’s charity, was not exempt from property taxation. Corporation of Presiding Bishop v. Dept. of Rev., 6 OTR 268 (1975), aff’d 276 Or 775, 556 P2d 685 (1976)

This section grants tax exemption only to such real or personal property as is actually used in charitable work carried on. Golden Writ of God v. Dept. of Rev., 9 OTR 475 (1984), aff’d300 Or 479, 713 P2d 605 (1986)

In determining whether property is tax exempt pursuant to this section, test is use to which property is put. State ex rel. NW Medical Lab. v. Wilcox, 10 OTR 181 (1985)

Charitable organization’s de minimis use of property does not qualify property for exemption where use is not reasonably necessary for carrying out charitable purposes. Multnomah County v. Dept. of Rev., 13 OTR 339 (1995)

Storage of material to ensure availability in case of future charitable need is actual use of storage facility for charitable purpose, notwithstanding lack of distribution from facility. Corporation of the Presiding Bishop, LDS v. Dept. of Revenue, 14 OTR 244 (1997)

Actually and exclusively occupied and used

Where the plaintiff had a completed building and initiated its occupancy thereof prior to July 1, the property was actually and exclusively occupied within the meaning of this section. Soc. St. Vincent DePaul v. Dept. of Rev., 272 Or 360, 537 P2d 69 (1975)

Where evidence did not demonstrate which portion of entire parcel was devoted to exempt activities, no partial exemption could be allowed. Golden Writ of God v. Dept. of Rev., 300 Or 479, 713 P2d 605 (1986)

Phrase “exclusively used” refers to primary, as opposed to incidental, use of property. Mercy Medical Center, Inc. v. Dept. of Rev., 12 OTR 305 (1992)

Where charitable organization acquired vacant lot but had not yet started to build home on it, lot was “actually and exclusively occupied or used” by organization in carrying out its charitable work of acquiring vacant lots and building affordable houses on those lots; thus, charitable organization was entitled to receive tax exemption from property taxes assessed on lot. Habitat for Humanity v. Dept. of Rev., 360 Or 257, 381 P3d 809 (2016)

Property owned or being purchased

Property held under a lease agreement with the United States Government did not qualify for an exemption under this section. Eugene Yacht Club v. Dept. of Rev., 6 OTR 35 (1975)

Incorporation of leased property into real property of charitable organization did not alter requirement that application for exemption of leased property be made separately under ORS 307.112. Garten Foundation v. Dept. of Rev., 12 OTR 554 (1993)

Benevolent or charitable institutions

In general

Statutes exempting property are strictly construed against the one claiming the exemption. Emanuel Lutheran Charity Bd. v. Dept. of Rev., 4 OTR 410 (1971), aff’d 263 Or 287, 502 P2d 251 (1972)

Property, both real and personal, was held, occupied and actually used for charitable, benevolent purposes of the organization, and was exempt. Parkhurst v. Dept. of Rev., 4 OTR 586 (1971)

A charitable enterprise does not lose its exemption merely because it engages in competition with taxable businesses. YMCA v. Dept. of Rev., 268 Or 633, 522 P2d 464 (1974)

If the activity undertaken on the property substantially contributes to the furtherance of the charity’s goals, the property will be exempted. YMCA v. Dept. of Rev., 268 Or 633, 522 P2d 464 (1974); Mercy Medical Center, Inc. v. Dept. of Rev., 12 OTR 305 (1992)

An exemption is not lost because the property is not required to carry out the goals of the charity. YMCA v. Dept. of Rev., 268 Or 633, 522 P2d 464 (1974)

Owner of apartment complex used exclusively by retired persons, though nonprofit organization, is not a charity as implicitly required by this statute. Salem Non-Profit Housing, Inc., v. Dept. of Revenue, 9 OTR 265 (1983)

Although purposes of organization were to promote arts and crafts, exchange of ideas and establishment of community feeling of unity and were unquestionably worthwhile and beneficial, they could not be said to be charitable as used in this section. Oregon Country Fair v. Dept. of Rev., 10 OTR 200 (1986)

Activities of emergency veterinary clinic founded with private donation and formed as nonprofit organization met some requirements of charitable organization but did not meet taxpayer burden of qualifying as charitable institution under this section. Dove Lewis Mem. Emer. Vet. Clinic v. Dept. of Rev., 301 Or 423, 923 P2d 320 (1986)

Property must qualify on its own merits to receive tax exemption and plaintiff failed to prove its right to charitable exemption under this section for either of two properties appealed. YMCA v. Dept. of Rev., 11 OTR 101 (1988), aff’d 308 Or 644, 784 P2d 1086 (1989)

Personal property of public defender service is property of charitable organization and public defender service is involved in gift or giving, even though public defender service has contractual obligation to perform indigent defense and is compensated by state. Southwestern Oregon Public Defender Services, Inc. v. Dept. of Rev., 312 Or 82, 817 P2d 1292 (1991)

Test to qualify as “charitable institution” is applied to organization overall, not to specific part or operation. Mercy Medical Center, Inc. v. Dept. of Rev., 12 OTR 305 (1992)

Retail store stocked by donated goods does not meet requirements of this statute, even if income is used for charitable purposes. Kiwanis Club v. Dept. of Rev., 12 OTR 318 (1992)

Directing charitable efforts toward particular ethnic group did not rob facility of charitable character. Rigas Maja, Inc. v. Dept. of Rev., 12 OTR 471 (1993)

Requirement that retail store deal exclusively in donated property applies both to distributed inventory and to any inventory sold to public. Assistance Guild of Bend v. Dept. of Rev., 13 OTR 236 (1995)

Scientific institution is not required to have charity as primary purpose to qualify as charitable. Math Learning Center v. Dept. of Revenue, 14 OTR 62 (1996)

Educating public on particular ideology advanced by tax exempt organization as means for indirectly achieving public good does not qualify as charitable work. Native Forest Council v. Lane County Assessor, 17 OTR 30 (2003)

Mutual benefit corporation cannot have sufficient charitable attributes for property of corporation to qualify for exemption. Rogue Gem and Geology Club, Inc. v. Josephine County Assessor, 17 OTR 446 (2003)

Hospitals

The fact that patients able to pay are required to do so does not deprive a hospital, otherwise eligible to be classed as a charitable institution, of its charitable character. Ev. Lutheran Good Samaritan Soc. v. Dept. of Rev., 5 OTR 14 (1972)

The tax-exempt hospital did not qualify for property tax exemption for property it leased to the county health department. Albany Gen. Hosp. v. Dept. of Rev., 6 OTR 446 (1976), aff’d 277 Or 727, 561 P2d 1029 (1977)

Religious institutions

Land merely being held for future use is not being actually occupied or used for benevolent or charitable work. Emanuel Lutheran Charity Bd. v. Dept. of Rev., 263 Or 287, 502 P2d 251 (1972)

Advancement of religion is a charitable purpose within the meaning of the statute. Archdiocese v. Dept. of Rev., 5 OTR 111 (1973), aff’d 266 Or 419, 513 P2d 1137 (1973); Diocese of Ore. v. Dept. of Rev., 5 OTR 126 (1973), aff’d 266 Or 419, 513 P2d 1138 (1973)

Determination by church officers regarding what lands are reasonably required and what uses will further religious purposes are to be given deference absent clear indication of bad faith or fraud. Multnomah County v. Dept. of Revenue, 6 OTR 325 (1976)

Building owned by incorporated religious organization housing members of organization, who lived communally by dictates of their religion, was exempt from real property taxation under this section. House of Good Shepherd v. Department of Revenue, 300 Or 340, 710 P2d 778 (1985)

Literary organizations

Organization devoted to production of plays is literary organization. Theatre West of Lincoln City, Ltd. v. Dept. of Rev., 319 Or 114, 873 P2d 1083 (1994)

Nonprofit literary organization qualifies for exemption if operating for public good, which is revealed by considering: 1) membership base; 2) property ownership and use; 3) administration; 4) activities; and 5) promotion of public welfare. Oregon Writer’s Colony v. Dept. of Revenue, 14 OTR 69 (1996)

Attorney General Opinions

Exemption of property owned by nonprofit corporation and leased to State Commission for Blind, (1977) Vol 38, p 1592

Law Review Citations

2 EL 164 (1971)

Source

Last accessed
May 26, 2023

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