2017 ORS 307.330¹
Commercial facilities under construction

(1) Except for property centrally assessed by the Department of Revenue, each new building or structure or addition to an existing building or structure is exempt from taxation for each assessment year of not more than two consecutive years if the building, structure or addition:

(a) Is in the process of construction on January 1;

(b) Is not in use or occupancy on January 1;

(c) Has not been in use or occupancy at any time prior to such January 1 date;

(d) Is being constructed in furtherance of the production of income; and

(e) Is, in the case of nonmanufacturing facilities, to be first used or occupied not less than one year from the time construction commences. Construction shall not be deemed to have commenced until after demolition, if any, is completed.

(2) If the property otherwise qualifies for exemption under this section and ORS 307.340 (Filing proof for cancellation of assessment), the exemption shall likewise apply to any machinery or equipment located at the construction site which is or will be installed in or affixed to such building, structure or addition. [1959 c.246 §1; 1961 c.552 §1; 1971 c.284 §1; 1991 c.459 §55; 1997 c.541 §117]

Notes of Decisions

Applicant is re­quired to file proof that prop­erty meets each require­ment for exemp­tion, notwithstanding that assessor may possess same in­for­ma­­tion from other sources. Urban Office & Parking v. Dept. of Rev., 4 OTR 523 (1971)

In using term “structure,” legislature intended that complex of buildings designed for specific use and not adaptable to any other purpose could be regarded as useless until whole complex or structure is operable and that completed buildings not be subject to taxa­tion until whole complex of buildings is completed. Collier Carbon v. Dept. of Rev., 5 OTR 1 (1972), aff’d263 Or 414, 502 P2d 595 (1972); Multnomah County v. Dept. of Rev., 13 OTR 147 (1994)

Once having selected the two consecutive years for exemp­tion the taxpayer cannot revoke his selec­tion and secure the exemp­tion for different consecutive years. Georgia-Pac. Corp. v. Dept. of Rev., 264 Or 260, 504 P2d 704 (1972)

The extent of the exempt construc­tion must be limited to the basic func­tional and substantially necessary ele­ments of the structure. Allen v. Dept. of Rev., 5 OTR 185 (1973)

A structure under construc­tion is eligible for prop­erty tax exemp­tion under this sec­tion if it is used for produc­tion but fails to produce a commercially acceptable product. Multnomah County v. Dept. of Rev., 5 OTR 437 (1974)

Where only two percent of facility was used for manufacturing “kits” for installa­tion on aircraft, facility did not qualify for exemp­tion as a manufacturing facility under construc­tion. Aero Air, Inc. v. Dept. of Revenue, 8 OTR 461 (1980)

Based on legislative intent behind this sec­tion which was to promote state’s economy, together with technological and scientific complexity of opera­tion, salmon hatchery opera­tion was income-producing facility other than nonmanufacturing facility and entitled to tax exemp­tion provided by this sec­tion. Bain v. Dept. of Revenue, 293 Or 163, 646 P2d 12 (1982)

Use of part of facility during construc­tion period for purpose of facilitating further construc­tion was not “use or occupancy” where not for purpose of income genera­tion. Multnomah County v. Dept. of Rev., 13 OTR 147 (1994)

Use or occupancy of por­tion of nonindustrial building or structure within one year of commence­ment of construc­tion negates exemp­tion even though building or structure is not complete. Multnomah County v. Dept. of Rev., 13 OTR 223 (1995)

Building or structure cannot be divided into separate por­tions so that one por­tion qualifies for exemp­tion but other por­tion does not. Multnomah County v. Dept. of Rev., 13 OTR 223 (1995)

Property being constructed in furtherance of “produc­tion of income” includes building constructed for purpose of one-time gain on sale of prop­erty. North Harbour Corp. v. Dept. of Revenue, 16 OTR 91 (2002)

“Building” means single, self-contained unit designed for occupancy. Trendwest Resorts, Inc. v. Dept. of Revenue, 18 OTR 187 (2005), aff’d 340 Or 413, 134 P3d 932 (2006)

“Structure” means: 1) single, self-contained unit not designed for occupancy; or 2) combina­tion of at least two interdependent units, one of which may be building. Trendwest Resorts, Inc. v. Dept. of Revenue, 18 OTR 187 (2005), aff’d 340 Or 413, 134 P3d 932 (2006)

Use or occupancy need not be in furtherance of produc­tion of income. Trendwest Resorts, Inc. v. Dept. of Revenue, 340 Or 413, 134 P3d 932 (2006)

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/­ors/­ors307.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 307, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano307.­html (2017) (last ac­cessed Mar. 30, 2018).
 
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.