Chapter 308

NOTES OF DECISIONS

Programs administered by Department of Revenue that allow preferential assessment for farm and forestland are not “programs affecting land use” and are not subject to requirement of statewide goal and local comprehensive plan compliance under ORS 197.180. Springer v. LCDC, 111 Or App 262, 826 P2d 54 (1992), Sup Ct review denied

ATTY. GEN. OPINIONS: Application of Article XI, section 11b of Oregon Constitution to this chapter, (1990) Vol 46, p 388

LAW REVIEW CITATIONS: 5 EL 516 (1975)

308.010

LAW REVIEW CITATIONS: 51 OLR 44 (1971)

308.115

NOTES OF DECISIONS

Improvements to real property made by a tenant pursuant to a “shell and allowance” agreement are to be assessed to the tenant rather than the landlord. Shields v. Dept. of Rev., 5 OTR 160 (1972), as modified by 266 Or 461, 513 P2d 784 (1973)

Improvements to real property made by a tenant are not “owned separately and apart from the land” unless the parties agree that the improvements may remain the property of the tenant and be removable by him. Shields v. Dept. of Rev., 266 Or 461, 513 P2d 784 (1973)

Separate assessments of segments of real property which are not separately owned are not authorized under statutory scheme. Bear Creek Plaza v. Dept. of Rev., 12 OTR 272 (1992)

308.125

NOTES OF DECISIONS

Generation of separate tax statement for owner of undivided interest in parcel of real property does not require that value of undivided interest be separately assessed. Talarico v. Deschutes County Assessor, 17 OTR 37 (2003)

308.146

NOTES OF DECISIONS

To determine assessed value of property, lesser of maximum assessed value or real market value for land must be added to lesser of assessed value or real market value for improvements. Taylor v. Clackamas County Assessor, 14 OTR 581 (1999)

308.156

NOTES OF DECISIONS

Disqualification of property from exemption between January 1 and July 1 relates back to make property disqualified as of January 1. Living Enrichment Center Properties, LLC v. Dept. of Revenue, 19 OTR 324 (2007)

308.205

NOTES OF DECISIONS

True cash value

Book value is not, as matter of law, true cash value. La Pointe’s, Inc. v. Dept. of Rev., 4 OTR 512 (1971)

Without a valid foundation for different assessments, the assessment of part of the land of a shopping center at a dollar rate per square foot different from the remaining land of the center is a violation of the uniformity clauses of the Ore. Const. Henshaw v. Dept. of Rev., 5 OTR 263 (1973)

In reaching determination of true cash value of “super-custom built home” appraisers for both parties properly recognized that overbuilding is type of obsolescence which must be considered in determining value of property for assessment purposes. Fritz v. Dept. of Rev., 7 OTR 375 (1978)

Where property was listed for sale at price of $230,000 but evidence was clear that nothing came of the listing in spite of market activity, such listing price was not evidential of market value. Tannler v. Dept. of Rev., 7 OTR 392 (1978)

Goal of appraisal process is to determine property’s true cash value, which is its market value as of assessment date. Bylund v. Dept. of Rev., 7 OTR 532 (1978)

Evidence showed that on facts of case income approach yielded better measure of property’s true cash value than cost approach, but because this approach resulted in higher value than that pled by Department of Revenue decree was modified to conform to pleadings. Brooks Resources Corp. v. Dept. of Rev, 286 Or 499, 595 P2d 1388 (1979)

Enforcement of Revenue Department’s subpoena of cable television company’s income and expense records is proper where company can cite no rule or regulation, promulgated under this section, that would exclude from determination of true cash value consideration of income derived from operations. Southern Oregon Broadcasting Co. v. Dept. of Revenue, 287 Or 35, 597 P2d 795 (1979)

If the highest and best use of land as vacant and available reduced value of existing improvements so that total value of land and improvement is less than value of existing improvements and their corresponding current land use value, then property should be valued at its existing use. Oregon Broadcasting Co. v. Dept. of Rev., 287 Or 267, 598 P2d 689 (1979)

While land and improvements are to be valued separately, when both are at issue, they should be valued so that together they constitute highest and best use of property as a whole. Oregon Broadcasting Co. v. Dept. of Rev., 287 Or 267, 598 P2d 689 (1979)

Mandate of this section that if property has no immediate market value true cash value is amount of money that justly compensates owner for loss of property was not followed when single fixed value was applied to wells and septic systems in face of uncontroverted testimony revealing that costs could vary depending on conditions. McConoughey v. Dept. of Rev., 10 OTR 125 (1985)

Where court found highest and best use of subject property was its current use and there were little usable sales and income data, court gave most weight to cost approach in finding true cash value of property. Freedom Fed. Savings and Loan v. Dept. of Rev., 11 OTR 317 (1989), aff’d 310 Or 723, 801 P2d 809 (1990); STC Submarine, Inc. v. Dept. of Rev., 13 OTR 14 (1994), aff’d 320 Or 589, 890 P2d 1370 (1995)

Appraisal made for purposes of financing or obtaining loan is not evidence of true cash value, rather, test of true cash value is value in exchange. Skerritt v. Dept. of Rev., 12 OTR 65 (1991)

Offers to purchase conditioned upon obtaining conditional use permit to build were persuasive evidence of true case value. Hines v. Dept. of Rev., 12 OTR 78 (1991)

Test of highest and best use is not mechanical application of whether use is physically possible, legally permissible, financially feasible and maximally productive, but each of those conditions must be related to market conditions and where use made is more intensive than market, true cash value must be determined based on market’s probable use of property at economic rent. Fred Meyer, Inc. v. Dept. of Rev., 12 OTR 85 (1991)

Where improvements to land were inconsistent with highest and best use of land for agriculture and grazing, cost of improvements was improperly considered in determining true cash value of land. Connecticut General Life Ins. Co. v. Dept. of Rev., 12 OTR 461 (1993)

Factors affecting value

In the valuation of a “going concern,” the market to be used is that of the operator of a going concern rather than for a sale on liquidation. Avison Lbr. Co. v. Dept. of Rev., 5 OTR 45 (1972)

Real property (golf course) could be restricted to open use, operated as a loss and still have market value if there was possibility of profitable operation in foreseeable future. Willamette Factors v. Department of Revenue, 8 OTR 400 (1980), aff’d 291 Or 568, 633 P2d 781 (1981)

Federal and state investment and energy income tax credits, partially available to subsequent purchaser of subject property, had direct influence on market value as of assessment date. Joseph Hydro Associates, Ltd. v. Dept. of Rev., 10 OTR 277 (1986)

Fact that plaintiff is federal government and able to avoid certain market expenses, such as construction insurance, is not relevant for purposes of establishing fair market value. General Services Adm. v. Dept. of Rev., 10 OTR 290 (1986)

Provision of this section establishing different tax valuation for four or more lots held by same owner within same subdivision violates Article I, section 32 of Oregon Constitution by establishing classification of property for purpose of taxation that is not based on inherent, qualitative, genuine and rational differences between classes of property. Mathias v. Dept. of Revenue, 11 OTR 347 (1990), aff’d 312 Or 50, 187 P2d 272 (1991)

Market value adjustment to reflect legal restriction on property use applies whether restriction was incurred voluntarily or involuntarily. Bayridge Assoc. Ltd. Partnership v. Dept. of Rev., 13 OTR 24 (1994), aff’d 321 Or 21, 892 P2d 1002 (1995)

Whether compensation for government restrictions on property is part of property’s market value depends on whether compensation is transferable to subsequent purchasers of property. Bayridge Assoc. Ltd. Partnership v. Dept. of Rev., 13 OTR 24 (1994)

Where financial feasibility of development is unknown, market will attribute some value to possibility of development. Sells v. Dept. of Rev., 13 OTR 179 (1994)

Where tax lot is divided into more than one assessment account, proper procedure is to determine value of tax lot as whole, then allocate portion of total tax lot value to each assessment account. Tanner v. Dept. of Revenue, 13 OTR 393 (1995)

Determination of value of property as it exists on assessment date does not preclude reduction in assessed value based on changes occurring during tax year. Shatzer v. Dept. of Revenue, 13 OTR 436 (1996), aff’d 325 Or 211, 934 P2d 1119 (1997)

Where highest and best use of parcel is as part of joint development with adjoining parcels under common ownership, parcels may be valued as single economic unit. White v. Washington County Assessor, 17 OTR 45 (2003)

Under public interest rule for valuing property subject to governmental restrictions, value of property without regard to restrictions minus value of government interest yields value of taxable private interest in property. Wilsonville Heights Assoc., Ltd. v. Dept. of Revenue, 17 OTR 139 (2003), aff’d 339 Or 462, 122 P3d 499 (2005)

In adjusting value of affordable housing project, value of government credit support is equivalent to present value of rent lost by property owner due to governmental restrictions. Wilsonville Heights Assoc., Ltd. v. Dept. of Revenue, 17 OTR 139 (2003), aff’d 339 Or 462, 122 P3d 499 (2005)

Governmental restriction that conditions use of property without prohibiting all beneficial use does not render property completely without taxable value. Poddar v. Dept. of Revenue, 341 Or 186, 139 P3d 962 (2006)

Methods of valuation

In absence of direct evidence of value which can be used for market data approach, income or capitalization approach may be used when income attributable to the property can be segregated with reasonable certainty. Houghton v. Dept. of Rev., 4 OTR 451 (1971), aff’d 261 Or 564, 495 P2d 715 (1972)

Capitalization of income was proper method of determining true cash value. Houghton v. Dept. of Rev., 4 OTR 451 (1971), aff’d 261 Or 564, 495 P2d 715 (1972)

Rule-making power given department does not empower it to disqualify a procedure which patently should result in a determination of true cash value. La Pointe’s, Inc. v. Dept. of Rev., 4 OTR 512 (1971)

If improvements on the land would produce income for a buyer purchasing the land for its highest and best use, it is appropriate to add to the value of the land the value attributable to the rental income from the improvements. Nepom v. Dept. of Rev., 264 Or 195, 504 P2d 1039 (1972)

In the valuation of an operating sawmill, the “cost approach is the proper method to be used.” Avison Lbr. Co. v. Dept. of Rev., 5 OTR 45 (1972)

Where information necessary to an evaluation based on the income approach is not available, the cost approach to market value is the proper appraisal method. Shields v. Dept. of Rev., 266 Or 461, 513 P2d 784 (1973)

If sale of property is recent, voluntary, arm’s length transaction between buyer and seller, both of whom are knowledgeable and willing, sales price, while not conclusive, is very persuasive of market value. Kem v. Dept. of Rev., 267 Or 111, 514 P2d 1335 (1973); Rhodes v. Dept. of Rev., 12 OTR 24 (1991)

If market exists, property should be valued by using market data approach. Kem v. Dept. of Rev., 267 Or 111, 514 P2d 1335 (1973)

Principles governing use of dealings in property itself to show its value apply equally to transactions before and after valuation date. Sabin v. Dept. of Rev., 270 Or 422, 528 P2d 69 (1974)

Hypothetical subdivision for assessment purposes is proper when evidence indicates that such division is necessary to effectuate highest and best use. Sabin v. Dept. of Rev., 270 Or 422, 528 P2d 69 (1974)

Although not conclusive, price paid at time of assessment is one of best and most satisfactory standards for estimation of actual value, unless special circumstances or comparable transactions indicate it to be out of line with other market data material. Equity Land Resources, Inc. v. Dept. of Rev., 268 Or 410, 521 P2d 324 (1974)

The value of a specialized building having no immediate value may be assessed at its replacement cost, less depreciation. Benevolent Protective Order of Elks, Lodge 1680 v. Dept. of Rev., 6 OTR 488 (1976)

If an active market for used machinery and equipment exists, those costs, and not new costs less depreciation, are to be used to establish true cash value. Lamers v. Dept. of Rev., 8 OTR 106 (1979)

Where residence had been on market for years at price lower than assessed valuation, true cash value was “amount of money that would justly compensate owner for loss of property,” with bona fide listing price as upper limit. Martin v. Dept. of Rev., 8 OTR 141 (1979)

Where there was abundance of economic data in record from comparable buildings, income approach to valuation of medical office building was appropriate despite newness of construction. Portland Adventist Hospital v. Dept. of Rev., 8 OTR 342 (1980)

Separate assessment of unique commercial tenant improvements using cost basis was inappropriate absent evidence that capitalization of rent did not reflect improvement value. Bylund v. Dept. of Revenue, 9 OTR 4 (1981), aff’d 292 Or 582, 641 P2d 577 (1982)

Since former versions of ORS 215.203 and 215.213 provided that dwellings provided in conjunction with farm use were nonfarm uses, half-acre homesite on 111 acre parcel zoned Exclusive Farm Use was properly valued as homesite rather than farmland. Chapin v. Dept. of Revenue, 290 Or 931, 627 P2d 480 (1981)

In assessing bare forest land for purpose of ad valorem taxation, Department of Revenue’s utilization of “abstraction” approach to establishing market value was appropriate, however Department erred in failing to give consideration to prepurchase valuation of merchantable timber by knowledgeable parties to sales transactions of timber land in area. Publishers Paper v. Dept. of Rev., 292 Or 836, 644 P2d 1089 (1982)

Where taxpayers owned buildings but not land beneath them, best measure of market value was depreciated cost of buildings, because until landowners take action to terminate taxpayers’ use of land, taxpayers have full use of buildings. Cove Sportmans Club v. Dept. of Rev., 11 OTR 40 (1988)

When taken in context of other relevant statutes, this section required true cash value of each tax lot in fully developed subdivision to be assessed by itself, not as portion of larger piece of property. First Interstate Bank v. Dept. of Revenue, 306 Or 450, 760 P2d 880 (1988)

Where property is under nonconforming use under nontransferable, limited, revocable use permit, property is unmarketable as it exists and must be valued under this section at amount that would justly compensate owner for its loss; under this method of value, it is appropriate to use actual rent rather than estimated market rent because loss to owner would be actual rent. Wy’East Color, Inc. v. Dept. of Rev., 12 OTR 102 (1991)

In appraising self-storage facility, appraiser should use data and methods market uses. Mikkelson v. Dept. of Rev., 12 OTR 111 (1991)

Where uniqueness of property made traditional valuation difficult, sale of highly publicized property within a few months of assessment date was best indicator of value. Ernst Brothers Corp. v. Dept. of Rev., 12 OTR 527 (1993), aff’d 320 Or 294, 882 P2d 591 (1994)

Income approach was improper where income attributable to taxable tangible property could not be distinguished from income attributable to nontaxable business operation. Lincoln County v. Dept. of Rev., 12 OTR 548 (1993)

Real market value of personal rental property is taxpayer’s cost of obtaining property, not sales price upon disposition. H-P Ventures, Inc. v. Dept. of Rev., 13 OTR 330 (1995)

Where property improvement is partially completed, improvement value is based on sum of improvement component values determined by percentage completion for each component, not percentage completion for improvement as whole. Watkins v. Dept. of Revenue, 14 OTR 227 (1997)

Use of different calculation methods to determine real market value of various property types does not violate Oregon constitutional requirement for uniformity of assessment or requirement for equal treatment of citizens. Brummell v. Dept. of Revenue, 14 OTR 303 (1998)

For purposes of valuing private interest in property subject to governmental restrictions, capitalization rate must be based on estimated terms and returns necessary to attract debt and equity capital from general market sources on date of assessment. Wilsonville Heights Assoc., Ltd. v. Dept. of Revenue, 17 OTR 139 (2003), aff’d 339 Or 462, 122 P3d 499 (2005)

Where seller and buyer of property had same ownership and board of directors, sale was not “arm’s-length transaction” indicative of real market value. Grant County Assessor v. Hawkeye Mining Co., 19 OTR 382 (2007)

COMPLETED CITATIONS: Oak Acres Mobile Homes Park, Inc. v. Dept. of Rev., 4 OTR 340 (1971), aff’d 260 Or 562, 491 P2d 620 (1971); J. R. Widmer, Inc. v. Dept. of Rev., 4 OTR 361 (1971), aff’d 261 Or 371, 494 P2d 854 (1972)

LAW REVIEW CITATIONS: 59 OLR 124 (1980)

308.210

NOTES OF DECISIONS

“Real market value” means the assessor’s estimate of real market value as of July 1. Cascade Steel Rolling Mills, Inc. v. Dept. of Rev., 13 OTR 252 (1995)

Real market value and estimated real market value on same date are identical except where property is subject to depreciation or waste. Cascade Steel Rolling Mills, Inc. v. Dept. of Rev., 13 OTR 252 (1995)

Where appeal is to board of ratio review, burden on taxpayer is to prove that events occurring after July 1 caused value of property at some point during tax year to be less than July 1 estimate. Cascade Steel Rolling Mills, Inc. v. Dept. of Rev., 13 OTR 252 (1995)

308.215

NOTES OF DECISIONS

The land and improvements must be stated separately and are not to be considered as a single entity. Nepom v. Dept. of Rev., 272 Or 249, 536 P2d 496 (1975)

Time requirements and budget limitations have caused Oregon counties, with legislative sanction of this section, to make use of trending and indexing to keep property values reasonably current. Price v. Dept. of Rev., 7 OTR 18 (1977)

Long standing administrative practice was to include development fees in land value. Lincoln County v. Dept. of Rev., 11 OTR 5 (1988)

Appraisal theory holds nonconforming use is exception to valuing land as vacant, but this section fails to recognize that exception, so lower “vacant” value must be placed on roll. Lincoln County v. Dept. of Rev., 11 OTR 5 (1988)

COMPLETED CITATIONS: J.R. Widmer, Inc. v. Dept. of Rev., 4 OTR 361 (1971), aff’d 261 Or 371, 494 P2d 854 (1972)

ATTY. GEN. OPINIONS: Responsibility for preparing property tax statements, (1973) Vol 36, p 695

308.225

ATTY. GEN. OPINIONS: Indication by county assessor of annexation of property to city on assessment roll while decision pending before Land Use Board of Appeals, (1980) Vol 41, p 99; “finality” of boundary change for purposes of property taxation if annexation is challenged in the courts, (1987) Vol 45, p 203

308.232

NOTES OF DECISIONS

The water system in a planned unit development was properly assessed by the Department of Revenue as having value for which taxes should have been assessed. Brooks Resources v. Dept. of Rev., 276 Or 1177, 558 P2d 312 (1976)

In assessing value of newly constructed medical building, which was not a unique situation but rather a well defined market with predictable income, income approach was more reliable than cost approach. Medical Bldg. Land Co. v. Dept. of Rev., 7 OTR 119 (1977)

Determining real market value of property requires that expense, time, risk, inconvenience and other problems in obtaining government authorization to develop property be considered. Cox v. Dept. of Rev., 12 OTR 535 (1993)

308.235

NOTES OF DECISIONS

Valuation

Where the “best use” of assessed property is for a multi-unit residence, it is improper to add to the assessment, the estimated present value of the older, single unit residence now on the property. Agate v. Dept. of Rev., 5 OTR 25 (1972)

Easements in gross are individual rights to be ignored in determining property value but easements appurtenant place restrictions on property and should be considered in valuing affected property. Rockwood Development Corp. v. Dept. of Rev., 10 OTR 95 (1985)

Common ownership with adjoining properties may not be considered in valuation. Neupert v. Dept. of Revenue, 13 OTR 407 (1995)

Where property is subject to public easement, discount in value must presume that full area of easement will be used by public. Neupert v. Dept. of Revenue, 13 OTR 407 (1995)

308.240

NOTES OF DECISIONS

Separate assessments of segments of real property which are not separately owned are not authorized under statutory scheme. Bear Creek Plaza v. Dept. of Rev., 12 OTR 272 (1992)

Description of property selected for assessment should be capable of being used for purposes of levy, collection, foreclosure and sale. Bear Creek Plaza v. Dept. of Rev., 12 OTR 272 (1992)

Where description by reference to lot number is inadequate to describe property interest being assessed, general description with reference to documents and diagrams creating interest can be sufficient. Avis Rent A Car System, Inc. v. Dept. of Revenue, 14 OTR 487 (1998), aff’d 330 Or 35, 995 P2d 1163 (2000)

308.242

NOTES OF DECISIONS

Taxpayer retained absolute right to challenge equalization board determination of value even though taxpayer request to county assessor sought value determined by board. Windmill Inns of America, Inc. v. Dept. of Revenue, 14 OTR 271 (1998)

308.250

NOTES OF DECISIONS

Even if there were precedent for allowing doctrine of equitable estoppel to be invoked against governmental unit on basis of oral communication over telephone by unknown person allegedly associated with governmental body, one cannot obtain through estoppel tax exemption not provided by statute. Proud Truck Sales, Inc. v. Dept. of Rev., 4 OTR 566 (1971)

Requirement of “sufficient documentary proof” for exemption under this section was not met where dealer mailed mere list of names and addresses of persons to whom he had sold mobile homes prior to May 1st without attachment to list of copies of contracts of sale, bills of sale or other forms of proof. Byer v. Dept. of Rev., 7 OTR 172 (1977)

308.256

NOTES OF DECISIONS

A dredge, which produces income by working gravel pits or river bottoms within the state’s boundaries, is to be fully assessed. Heenan and Domogalla v. Dept. of Rev., 5 OTR 78 (1972)

ATTY. GEN. OPINIONS: Ad valorem property taxation of maritime cargo containers, (1979) Vol 39, p 494

308.260

NOTES OF DECISIONS

A dredge, which produces income by working gravel pits or river bottoms within the state’s boundaries, is to be fully assessed. Heenan and Domogalla v. Dept. of Rev., 5 OTR 78 (1972)

308.285

NOTES OF DECISIONS

Order establishing value issued under this section is subject to de novo review by the Tax Court. Samoth Financial Corporation v. Dept. of Revenue, 8 OTR 408 (1980)

308.290

NOTES OF DECISIONS

The Department of Revenue is estopped to deny the taxpayer the right to change his election of the “current value of goods” method of assessment to the “average-inventory” method where the forms provided by the department failed to adequately advise the taxpayer of the right to elect the latter method. Uniroyal v. Dept. of Rev., 5 OTR 29 (1972)

This section contemplates that taxpayer may fail to file a return and imposes duty on assessor of listing and evaluating property from best information attainable from other sources. Liquid Air Inc. v. Dept. of Rev., 8 OTR 159 (1979)

Where taxpayer failed to file personal property return and assessor sent notice listing and evaluating property, which taxpayer reasonably assumed included free port exemption, assessor was estopped from asserting hardship application deadline under ORS 307.475 to preclude taxpayer’s later exemption claim. Liquid Air Inc. v. Dept. of Rev., 8 OTR 159 (1979)

On appeal from Revenue Department’s order to produce records for inspection, where taxpayer’s principal objection was that disclosure of documents to competitors would be detrimental but no evidence was presented that taxpayer was not protected by secrecy requirement of this section, taxpayer was required to comply with order. In re Willamette Industries, Inc., 8 OTR 324 (1980)

ATTY. GEN. OPINIONS: Application of Ballot Measure 47 (Oregon Constitution Article XI, section 11g) to retirements of property, (1996) Vol 48, p 67

308.296

NOTES OF DECISIONS

Penalty of 100 percent for failure to timely file personal property tax return is not grossly oppressive or disproportionate to offense. Ron Staley Enterprises, Inc. v. Dept. of Revenue, 15 OTR 63 (1999)

308.341 to 308.343

LAW REVIEW CITATIONS: 59 OLR 125 (1980)

308.345

See annotations under ORS 308A.092.

308.365

See annotations under ORS 308A.104.

308.375

See annotations under ORS 308A.077.

308.377

See annotations under ORS 308A.256.

308.380

See annotations under ORS 308A.059.

308.390

See annotations under ORS 308A.116.

308.397

See annotations under ORS 308A.113.

308.411

NOTES OF DECISIONS

Where electric generating facility was determined to be separate property subject to central assessment as utility and not part of integrated industrial plant, election not to disclose income was unavailable. D.R. Johnson Lumber Co. v. Dept. of Rev., 12 OTR 429 (1993), aff’d 318 Or 330, 866 P2d 1227 (1994)

Election to have plant appraised excluding consideration of functional and economic obsolescence precludes only use of income approach to valuation. J.R. Simplot v. Dept. of Rev., 321 Or 253, 897 P2d 316 (1995)

Election to have plant appraised excluding consideration of functional and economic obsolescence does not require that valuation be in excess of true cash value. J.R. Simplot v. Dept. of Rev., 321 Or 253, 897 P2d 316 (1995)

Taxpayer electing plant valuation without consideration of functional and economic obsolescence may introduce evidence relating to obsolescence for purpose of proving that obsolescence was not weighed in arriving at valuation. J.R. Simplot v. Dept. of Rev., 321 Or 253, 897 P2d 316 (1995)

Where taxpayer elects to have property valued without income approach, market data approach cannot be used unless appraiser can identify and add back that portion of market depreciation that is due to functional and economic obsolescence. Grant County v. Dept. of Revenue, 14 OTR 324 (1998)

308.425

NOTES OF DECISIONS

Partial value reduction formula is unconstitutional because under Article XI, section 11b, assessed value must be reduced to minimum value during tax year. Shatzer v. Dept. of Revenue, 13 OTR 436 (1996), aff’d on other grounds, 325 Or 211, 934 P2d 1119 (1997)

“Act of God” excludes all circumstances produced by human agency, including lack of due care or foresight. Clark v. Multnomah County Assessor, 17 OTR 72 (2003)

308.456

NOTES OF DECISIONS

Where value of land has not increased as indicated by trending, assessor may not apply higher trend percentage to improvement in order to assess overall trend percentage for property. Multnomah County v. Dept. of Revenue, 14 OTR 536 (1999)

308.490

NOTES OF DECISIONS

Where property value is determined using income approach that deducts for depreciation, no adjustment should be made for effect government use restrictions have on property value. Gangle v. Dept. of Rev., 13 OTR 343 (1995)

Requirement that in lieu of replacement value county assessor “shall consider” listed evaluation methods made use of evaluation method optional, but did not make inclusion of identified deductions optional when method was used. Gangle v. Dept. of Revenue, 320 Or 494 887 P2d 784 (1995)

Special assessment is available without regard to financial means of elderly persons served by home. Polk County v. Dept. of Revenue, 14 OTR 476 (1998)

Determination of income that could reasonably be expected if building is leased or rented to general public requires consideration of rent that building could obtain in open market without regard to fact property is devoted to housing elderly. St. Catherine’s Residence, Inc. v. Dept. of Revenue, 14 OTR 500 (1998); Hope Village, Inc. v. Dept. of Revenue, 17 OTR 370 (2004)

Legislative declaration that ordinary valuation methods are inappropriate with respect to homes for elderly indicates that income approach to valuation should be given substantially greater weight than sales comparison approach. Polk County v. Dept. of Revenue, 14 OTR 566 (1999)

Determination of amount for which property may be exchanged requires ordinary sales approach with sales of comparable elderly housing properties used where available. Hope Village, Inc. v. Dept. of Revenue, 17 OTR 370 (2004)

To determine gross income, deduction for annual operating expenses, reserves for replacement and insurance and depreciation are allowed only if related to hypothetical rental of housing to public generally. Hope Village, Inc. v. Dept. of Revenue, 17 OTR 370 (2004)

Market-derived capitalization rate to be used in determining expected gross income is rate for general housing properties, with property taxes included as element in rate. Hope Village, Inc. v. Dept. of Revenue, 17 OTR 370 (2004)

308.505 to 308.665

NOTES OF DECISIONS

In valuing a railroad, the weight to be given each approach customarily used (cost, stock and debt, and income) and the variation among appraisers in the minutiae of their methods, if in dispute, are left to the court to consider. Burlington Northern v. Dept. of Rev., 8 OTR 19 (1979), as modified by 291 Or 729, 635 P2d 347 (1981)

Land infested with tansy ragwort and therefore not used to obtain a profit was properly disqualified for special assessment at true cash value for farm use. Shepherd v. Dept. of Rev., 8 OTR 122 (1979)

While it is allowable to use only one approach in valuing property, whether in any given assessment one approach should be used exclusive of the others or is preferable to another or to combination of approaches is question of fact to be determined by the court. Pacific Power and Light Co. v. Dept. of Rev., 286 Or 529, 596 P2d 912 (1979)

Central assessment statutes create exception to public property tax exemption outlined in ORS 307.090. Pacificorp Power Marketing v. Dept. of Revenue, 340 Or 204, 131 P3d 725 (2006)

LAW REVIEW CITATIONS: 26 WLR 714 (1990)

308.505

NOTES OF DECISIONS

Definitions for “person” and “corporation” include municipal corporations. P.U.D. No. 1 of Snohomish County v. Dept. of Revenue, 17 OTR 290 (2004)

To be user of property taxpayer must have some degree of control, but not necessarily absolute control, over property at issue. Pacificorp Power Marketing v. Dept. of Revenue, 340 Or 204, 131 P3d 725 (2006)

LAW REVIEW CITATIONS: 26 WLR 711, 734 (1990)

308.510

NOTES OF DECISIONS

The method used by the Department of Revenue to determine the assessment value of the taxpayers’ flatcars, which method took into account the “going concern” value attributable to the property, was within the requirements of ORS 308.550. Trailer Train Co. v. Dept. of Rev., 5 OTR 170 (1973)

Where uncompleted plans and specifications for nuclear and coal-fired generating plants of public utility were in ownership and control of out-of-state engineering firm preparing them, though plaintiff had unliquidated claim for damages if plans were not delivered, the claim did not have situs in state and was not used for plaintiff’s business as of assessment date. Portland Gen. Elec. Co. v. Dept. of Rev., 7 OTR 33 (1977)

A property connection between corporations is shown by the right of one company to control the operations of the other company, and where Southern Pacific exerted executive control of Cottonbelt’s marketing, financing, management, operations and labor, Southern Pacific was the owner of Cottonbelt for purposes of these sections. Southern Pacific Trans. Co. v. Dept. of Revenue, 295 Or 47, 664 P2d 401 (1983)

Plaintiff’s use of water power constituted use of property subject to taxation and must be added to value of plaintiff’s hydroelectric facility. Joseph Hydro Associates v. Dept. of Rev., 11 OTR 49 (1988)

In determining value of small hydroelectric plant, reasonable basis of comparisons and analysis is actual rather than projected production. Falls Creek H.P. Ltd. Partnership v. Dept. of Rev., 12 OTR 55 (1991)

This section and ORS 308.515 do not prevent application of inventory tax exemption under ORS 307.400 to inventory of centrally assessed companies. Northwest Natural Gas Co. v. Dept. of Revenue, 19 OTR 367 (2007), aff’d 347 Or 536, 226 P3d 28 (2010)

308.515

NOTES OF DECISIONS

Where parties offered income and stock and debt approach to value in dispute over ad valorem taxes for five years, court rejected plaintiff’s use of 5-year average of net railway operating income as estimate of net cash flow and found defendant’s stock and debt approach more reliable but reduced defendant’s value to account for nonrail assets. Southern Pacific Trans. Co. v. Dept. of Rev., 11 OTR 138 (1989)

Where Tax Court determined utility’s true cash value for purpose of ad valorem tax assessment and incorrectly applied cost approach to valuation, value increased. PP&L v. Dept. of Rev., 308 Or 49, 775 P2d 303 (1989)

Where primary use of facility was generating electricity for sale to power companies, fact that first priority of facility was supplying steam to adjacent commonly owned lumber mill did not make central assessment of facility as utility property improper. D.R. Johnson Lumber Co. v. Dept. of Rev., 12 OTR 429 (1993), aff’d318 Or 330, 866 P2d 1227 (1994)

Where tour boat was restricted to operating in nonocean waters, payment of Ocean Charter Vessel License fee did not exempt vessel from assessment as water transportation property. Swashbuckler, Inc. v. Dept. of Rev., 12 OTR 476 (1993)

Assessment of railroad cars while exempting certain classes of non-railroad property did not violate federal law prohibiting discriminatory taxation of railroads. Dept. of Rev. of Oregon v. ACF Industries, Inc., 510 U.S. 332, 114 S Ct 843, 127 L Ed 2d 165 (1994)

This section and ORS 308.510 do not prevent application of inventory tax exemption under ORS 307.400 to inventory of centrally assessed companies. Northwest Natural Gas Co. v. Dept. of Revenue, 19 OTR 367 (2007), aff’d 347 Or 536, 226 P3d 28 (2010)

ATTY. GEN. OPINIONS: Ad valorem property taxation on maritime cargo containers, (1979) Vol 39, p 494

LAW REVIEW CITATIONS: 26 WLR 711, 734 (1990)

308.517

ATTY. GEN. OPINIONS: Assessment of ad valorem property tax on maritime cargo containers, (1979) Vol 39, p 494

308.522

NOTE: Repealed as of January 1, 2002

ATTY. GEN. OPINIONS: Application of Ballot Measure 47 (Oregon Constitution Article XI, section 11g) to retirements of property, (1996) Vol 48, p 67

308.540

NOTES OF DECISIONS

308.550

NOTES OF DECISIONS

Tax apportionment formula used by Department of Revenue which allocated unit value to state on basis of time spent in air by aircraft that flew over but did not land in state did not violate “reasonable method” requirement of this section. Alaska Air Lines, Inc. v. Dept. of Rev., 307 Or 406, 769 P2d 193 (1989)

LAW REVIEW CITATIONS: 26 WLR 711, 734 (1990)

308.555

NOTES OF DECISIONS

Leases constitute fractional interest in leased property, so value of lease payments must be accounted for to capture full value of property. Delta Air Lines, Inc. v. Dept. of Revenue (II), 13 OTR 372 (1995), modified 328 Or 596, 984 P2d 836 (1999)

LAW REVIEW CITATIONS: 26 WLR 711, 740 (1990)

308.558

NOTES OF DECISIONS

Where special equipment becomes part of aircraft and is not usable except in connection with aircraft, equipment is not subject to assessment as separate property. Thermal Graphics, Inc. v. Dept. of Revenue, 14 OTR 429 (1998)

308.590

NOTES OF DECISIONS

Under pre-2003 version of statute, Department of Revenue may not add centrally assessed omitted property assessments for prior years to current year roll. P.U.D. No. 1 of Snohomish County v. Dept. of Revenue, 17 OTR 290 (2004)

308.670

NOTE: Repealed as of January 1, 2002

NOTES OF DECISIONS

Comparable sales properties do not include properties sold for development purposes or that have development potential. Maksym v. Dept. of Revenue, 14 OTR 88 (1997)

308.707

NOTES OF DECISIONS

For first year of special assessment, maximum assessed value is obtained by multiplying changed property ratio by specially assessed value that is calculated based on unadjusted millage rate. Dept. of Revenue v. Butte Creek Associates II, 19 OTR 110 (2006)

308.740 to 308.790

See annotations under ORS 308A.300 to 308A.330.

308.755

See annotations under ORS 308A.309.

308.765

See annotations under ORS 308A.315.

308.805

NOTES OF DECISIONS

Taxpayer’s collection of funds which were set aside for contingent liability which did not arise and which were subsequently returned to patrons was “revenue” under this section and should have been included in taxpayer’s gross revenue for period. Lane Electric Cooperative v. Dept. of Rev., 10 OTR 501 (1987)

308.875

ATTY. GEN. OPINIONS: Mobile home as personal or real property under Oregon Homebuilders Law, (1972) Vol 36, p 41; application of Chapter 701 to mobile homes, (1978) Vol 38, p 694