ORS 307.400¹

Items of tangible personal property consisting of inventory, including but not limited to materials, supplies, containers, goods in process, finished goods and other personal property owned by or in possession of the taxpayer, that are or will become part of the stock in trade of the taxpayer held for sale in the ordinary course of business, are exempt from ad valorem property taxation. [Formerly 310.608; 1983 c.600 §2; 1987 c.691 §2; part renumbered 307.402 (Beverage containers) in 1991; 1995 c.379 §1; 1997 c.325 §22; 2001 c.753 §12]

See also annota­tions under ORS 310.608 in permanent edi­tion.

Notes of Decisions

Inventory exemp­tion applies only to items that will become physical part of taxpayer's stock in trade and not to items merely used in process of producing merchandise. Ore. Portland Ce­ment Co. v. Dept. of Rev., 4 OTR 545 (1971), aff'd 262 Or 617, 500 P2d 1044 (1972)

Stores of nuclear fuel and fuel oil held for use in generating electricity were not inventory within meaning of this sec­tion. Portland Gen. Elec. Co. v. Dept. of Rev., 7 OTR 33 (1977)

Property used in oyster raising opera­tion was not "farm machinery used in the planting, cultivating, or harvesting of farm crops" eligible for partial exemp­tion of this sec­tion. Oregon Oyster Co. v. Dept. of Rev., 7 OTR 308 (1978)

Taxpayer was not eligible for inventory exemp­tion from per­sonal prop­erty taxa­tion where he proved only that he was engaged in casual sales con­ducted sporadically for profit and not sale of equip­ment in ordinary course of business. Simpson v. Dept. of Rev., 299 Or 282, 702 P2d 399 (1985)

Legislature intended that exemp­tion from ad valorem taxes now codified in this sec­tion apply only to category of tangible per­sonal prop­erty defined in ORS 307.020 (Definition of "personal property"). Saunders v. Depart­ment of Revenue, 300 Or 384, 711 P2d 961 (1985)

Tangible per­sonal prop­erty used in plaintiff's fish farming and ranching opera­tions qualifies for exemp­tion under this sec­tion. Anadromous, Inc. v. Dept of Rev., 11 OTR 272 (1989)

Tax exemp­tion for inventory applies only to inventory of business that purchases, sells and replenishes its stock in ordinary course of business. Douglas County Assessor v. Dept. of Rev., 12 OTR 248 (1992)

Tax exemp­tion for inventory does not apply to business that sells its operating equip­ment or fixtures. Douglas County Assessor v. Dept. of Rev., 12 OTR 248 (1992)

Exemp­tion for prop­erty items "that are or will become" inventory does not apply to businesses that sell items only as incidental business ac­tivity. H-P Ventures, Inc. v. Dept. of Rev., 13 OTR 330 (1995)

Machinery and equip­ment utilized in winery are not "farm machinery and equip­ment." King Estate Winery, Inc. v. Dept. of Revenue, 14 OTR 169 (1997), aff'd 329 Or 414, 988 P2d 369 (1999)

Equip­ment used in brooder por­tion of vertically integrated egg produc­tion opera­tion is not "directly related" to produc­tion of fresh shell eggs. Willamette Egg Farms, Inc. v. Dept. of Revenue, 14 OTR 337 (1998), aff'd 331 Or 327, 14 P3d 609 (2000)

"Any other agricultural or horticultural use" does not include processing of crops or sale of processed crops. King Estate Winery, Inc. v. Dept. of Revenue, 329 Or 414, 988 P2d 369 (1999)

Chapter 307

Atty. Gen. Opinions

Validity of ad valorem and severance taxa­tion of logs destined for export, (1975) Vol 37, p 427; applica­tion of Article XI, sec­tion 11b of Oregon Constitu­tion to this chapter, (1990) Vol 46, p 388

Law Review Cita­tions

5 EL 516 (1975)

1 Legislative Counsel Committee, CHAPTER 307—Property Subject to Taxation; Exemptions, https://­www.­oregonlegislature.­gov/­bills_laws/­Archive/­2007ors307.­pdf (2007) (last ac­cessed Feb. 12, 2009).
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 307, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­307ano.­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