OAR 150-307-0460: Real and Personal Property Used for Placing Farm Crops in Storage

(1) Definitions: (a) “Primary” is the leading use or the use involving the highest percentage of time, including time held for use, relative to all the various uses. (b) “Processing” is altering the crop in any way such as: washing, icing, sorting, grading, waxing, boxing, slicing, or cutting. (c) “Storage of farm crops” refers to the holding area in which a product is placed before processing begins. (2) Personal property and real property machinery and equipment used to place a farm crop in storage are exempt from taxation. However, once processing of the crop is begun, it is no longer a crop, but a product. When the same machinery and equipment are used for both placing in storage and processing the primary use is what determines its assessment status. Example: Apples are picked and go directly into cold storage. This would be considered “placing in storage of farm crops.” When these same apples are sorted, washed or boxed it becomes a product and placing back into cold storage until sold is not considered “placing in storage of a farm crops.” At this point apples change from a crop to a product.