OAR 123-674-6000: FILING & COMPLIANCE — Exemption for Property Not Yet In Service

Under ORS 285C.170 qualified property of an actively authorized business firm in the enterprise zone is exempt from ad valorem taxation for up to two years, such that: (1) Consistent with OAR 123-674-6100(4), this exemption precedes and complements the one under ORS 285C.175, in that: (a) It applies only to property that is not yet placed in service before the (January-1) assessment date; and (b) The property is thus not qualified to start the three- to five-year exemption period in the present assessment year, even while the firm may have begun an exemption period on other property. (2) This exemption is largely interchangeable with the one under ORS 307.330 and 307.340 (Commercial Facilities Under Construction) according to OAR 150-307-0430 . Common elements include but are not limited to: (a) The firm must file with the county assessor, as described in section (3) of this rule, no later than April 1 of each assessment year when the property exists in the zone/county; (b) Any (utility) property subject to central assessment by the Department of Revenue is disallowed; (c) Exemption is permissible for not more than two consecutive years; and (d) The relationship to ORS 285C.175 as described in section (1) of this rule is the same in terms of the property’s being in service or not. (3)(a) The firm shall file the latest revision of Department of Revenue Form OR-AP-CIPEZ, 150-310-021, Application for Construction-in-Process Enterprise Zone Exemption. This is required even if the firm is also filing under ORS 285C.220 and 285C.225 to claim an exemption under ORS 285C.175 pursuant to the same authorization on other qualified property already in service. (b) An eligible business firm that instead files Form OR-AP-CACFC, 150-310-020, Application for Cancellation of Assessment on Commercial Facilities Under Construction, will receive only the treatment allowed under ORS 307.330; the firm would need to do so for situations described in section (5) of this rule. (4) The following are exempt in the zone, although they would not be under ORS 307.330: (a) Property at a project site where there is no construction of or additions to a building or structure; (b) Mere modifications to a building or structure; (c) A nonmanufacturing facility with re/construction taking less than a year’s time to complete and to put the facility in service; (d) Additional property that is not yet placed in service, even though a portion or element of the project, facility or structure has been completed, consistent with OAR 123-674-5300(2), as addressed in subsection (3)(a) of this rule; or (e) Machinery and equipment that will: (A) Not be installed in or affixed to a building, structure or addition thereto; or (B) Remain personal property after installation. (5) Irrespective that property might qualify under ORS 285C.175, an eligible business firm may not use the exemption under ORS 285C.170 if, for example: (a) The property had been exempted for the previous year at the same site in the zone under ORS 307.330, for whatever reason; (b) The firm is a hotel, motel or destination resort, regardless of the zone; (c) The firm’s Application is not yet approved—i.e., the firm is not authorized—consistent with OAR 123-674-3000 by the April-1 filing deadline in this rule; or (d) As of the January 1 assessment date: (A) The authorization is inactive under ORS 285C.165 unless also renewed by April 1; or (B) The zone is terminated. (6) Pending approval of its Application, respective to subsection (5)(c), an eligible business firm may file and have property exempted as allowed under ORS 307.330, such that: (a) After approval/authorization, the assessor may extend exemption under ORS 285C.170 to other qualified property subject to this rule; but (b) The ongoing exemption of the property in the next year may continue only under ORS 307.330, as applicable. (7) The county assessor shall not exempt property specifically under ORS 285C.170, if the assessor has a reasonable and particular basis to believe that: (a) The property is or will not be qualified property when placed in service including, for example, that the exemption would be in the third year of the first exemption under ORS 285C.175 pursuant to the (only) applicable authorization; (b) The authorized business firm will not qualify under ORS 285C.200; or (c) Any other applicable requirement under ORS 285C.170 or 285C.175 will not be satisfied, including but not limited to zone termination except as provided in OAR 123-650-9500(6) or 123-674-5050(3). (8) In the face of significant doubts about conformance with provisions under ORS 285C.170, the assessor may depend on reasonably requested information or confirmation from the firm or zone sponsor, before determining to grant the exemption. (9) Consistent with subsection (2)(c) of this rule, property exempted under ORS 285C.170 may not receive further exemption under ORS 307.330 beyond the cumulative two-year period. (10) In the event that the anticipated exemption under ORS 285C.175 is unclaimed, denied or disqualified, the exemption as described in this rule is not necessarily jeopardized in any way, even for such property that would not normally be exempt under ORS 307.330.