ORS 285C.175¹
Enterprise zone exemption
  • requirements
  • duration

(1) Property of an authorized business firm is exempt from ad valorem property taxation if:

(a) The property is qualified property under ORS 285C.180 (Qualified property generally);

(b) The firm meets the qualifications under ORS 285C.200 (Qualifications of business firm); and

(c) The firm has entered into a first-source hiring agreement under ORS 285C.215 (First-source hiring agreements).

(2)(a) The exemption allowed under this section applies to the first tax year for which, as of January 1 preceding the tax year, the qualified property is in service. The exemption shall continue for the next two succeeding tax years if the property continues to be owned or leased by the business firm and located in the enterprise zone.

(b) The property may be exempt from property taxation under this section for up to two additional tax years consecutively following the tax years described in paragraph (a) of this subsection, if authorized by the written agreement entered into by the firm and the sponsor under ORS 285C.160 (Agreement between firm and sponsor for additional period of exemption).

(c) If qualified property of a qualified business firm is sold or leased to an eligible business firm in the enterprise zone during the period the property is exempt under this section, the purchasing or leasing firm is eligible to continue the exemption of the selling or leasing firm for the balance of the exemption period, but only if any effects on employment within the zone that result from the sale or lease do not constitute substantial curtailment under ORS 285C.210 (Substantial curtailment of business operations).

(3)(a) The exemption allowed under this section shall be 100 percent of the assessed value of the qualified property in each of the tax years for which the exemption is available.

(b) Notwithstanding paragraph (a) of this subsection:

(A) If the qualified property is an addition to or modification of an existing building or structure, the exemption shall be measured by the increase in value, if any, attributable to the addition or modification.

(B) If the qualified property is an item of reconditioned, refurbished, retrofitted or upgraded real property machinery or equipment, the exemption shall be measured by the increase in the value of the item that is attributable to the reconditioning, refurbishment, retrofitting or upgrade.

(4)(a) An exemption may not be granted under this section for qualified property assessed for property tax purposes in the county in which the property is located on or before the effective date of the:

(A) Designation of the zone; or

(B) Approval of a boundary change for the zone if the property is located in an area added to the zone.

(b) An exemption may not be granted for qualified property constructed, added, modified or installed in the zone or in the process of construction, addition, modification or installation in the zone on or before the effective date of the:

(A) Designation of the zone; or

(B) Approval of a boundary change for the zone if the property is located in an area added to the zone.

(c) An exemption may not be granted for any qualified property that was in service within the zone for more than 12 months by January 1 of the first assessment year for which an exemption claim is made.

(d) An exemption may not be granted for any qualified property unless the property is in use or occupancy before July 1 of the year immediately following the year during which the completion of the construction, addition, modification or installation occurred.

(e) Except as provided in ORS 285C.245 (Termination), an exemption may not be granted for qualified property constructed, added, modified or installed after termination of an enterprise zone.

(5) Property is not required to have been exempt under ORS 285C.170 (Construction-in-process exemption) in order to be exempt under this section.

(6) The county assessor shall notify the business firm in writing whenever property is denied an exemption under this section. The denial of exemption may be appealed to the Oregon Tax Court under ORS 305.404 (Oregon Tax Court) to 305.560 (Appeals procedure generally).

(7) For each tax year that the property is exempt from taxation, the assessor shall:

(a) Enter on the assessment roll, as a notation, the assessed value of the property as if it were not exempt under this section.

(b) Enter on the assessment roll, as a notation, the amount of additional taxes that would be due if the property were not exempt.

(c) Indicate on the assessment roll that the property is exempt and is subject to potential additional taxes as provided in ORS 285C.240 (Disqualification), by adding the notation "enterprise zone exemption (potential additional tax)." [Formerly 285B.698]

Note: Sections 3 and 4, chapter 888, Oregon Laws 2007, provide:

Sec. 3. (1) Notwithstanding ORS 285C.175 (Enterprise zone exemption) (4) or 285C.180 (Qualified property generally) (1), property of a business firm that otherwise meets applicable requirements for authorization and qualification under ORS 285C.050 (Definitions for ORS 285C.050 to 285C.250) to 285C.250 (Designation of new zone following zone termination) is exempt from ad valorem taxation as provided in ORS 285C.175 (Enterprise zone exemption) if:

(a) The business firm is engaged in business activities or operations resulting from a transfer or lease of real property between the business firm and a public body; and

(b) At the time of the transfer or lease of real property, according to the most recent federal decennial census:

(A) The business activities or operations are located in a city having a population of more than 2,500 but less than 5,500; and

(B) The enterprise zone is located in a county having a population of more than 6,000 but less than 9,000.

(2) A business firm that satisfies the criteria of subsection (1) of this section is an eligible business firm for purposes of ORS 285C.140 (Application for authorization).

(3) A business firm described in subsection (2) of this section that seeks to have property exempted from property taxation as provided in ORS 285C.175 (Enterprise zone exemption) shall apply for authorization as provided in ORS 285C.140 (Application for authorization). [2007 c.888 §3]

Sec. 4. Section 3 of this 2007 Act is repealed on June 30, 2016. [2007 c.888 §4]

Notes of Decisions

Prior to 1993 amend­ment, sale of prop­erty from one firm to an­oth­er firm continuing opera­tion of business triggered forfeiture pro­vi­sion. Keeter Manufacturing, Inc. v. Dept. of Rev., 13 OTR 124 (1994)

Atty. Gen. Opinions

Effect of expira­tion of enterprise zone exemp­tion under Article XI, sec­tions 11 and 11a of Oregon Constitu­tion, (1997) Vol 49, p 6

1 Legislative Counsel Committee, CHAPTER 285C—Economic Development III, https://­www.­oregonlegislature.­gov/­bills_laws/­Archive/­2007ors285C.­pdf (2007) (last ac­cessed Feb. 12, 2009).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 285C, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­285cano.­htm (2007) (last ac­cessed Feb. 12, 2009).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information