Tax Exemption Programs

Oregon laws provide a property tax exemption for property owned or being purchased by certain qualifying organizations. The most common qualifying entities are: religious, fraternal, literary, benevolent, or charitable organizations and scientific institutions.

Property for which an exemption is requested must be actively occupied and used by the organization in a way that furthers its stated purpose. The property must also be reasonably necessary. Any portion of the property that does not meet these criteria is subject to assessment and taxation the same as all other taxable property.

The property tax exemptions explained in this circular are not automatic. The institution or organization claiming the exemption must file an application with the county assessor.

Exemption Forms

Religious Organizations

To qualify for the property tax exemption, the religious organization must have a constitution, bylaws, or charter which states its mission and purpose. An individual does not qualify.

Property may include:

·Houses of public worship.

·Buildings used for administration, education, literary, benevolent, charitable, entertainment, and recreation.
·Personal property.

·Pews and furniture used in the exempt buildings.

Any portion of a property that is not used for religious purposes will not be exempt.

Schools

Schools, academies, and student housing owned or being purchased by a religious or charitable organization may qualify for a property tax exemption. A private school may qualify for exemption provided the school is charitable.

Property must be used for accredited educational purposes.

Fraternal Organizations

A fraternal organization must be established under the lodge system with a ritualistic form of work and a representative form of government.

"Fraternal organizations" include but are not limited to: the Masons, the Knights of Pythias, the Knights of Columbus, and Benevolent and Protective Order of Elks, the Fraternal Order Of Eagle, the Loyal Order of Moose, the Independent Order of Odd Fellows, the Oregon State Grange, the American Legion, and the Veterans of Foreign Wars. College fraternities and sororities are not fraternal organizations under this law.

A fraternal organization must provide financial support to a charitable activity with the purpose of doing good for others rather than for the convenience of its members, and is not solely a social club.

The property must be actively occupied and used for lodge work, entertainment, or recreational purposes. It is not exempt if it is rented to others for sums greater than reasonable expenses for heat, lights, water, janitorial services, supplies, facility repair, and rehabilitation.

Literary, Benevolent, Charitable Organizations, and Scientific Institutions

The purpose and activity of these organizations or institutions is to provide charity. Generally, volunteers serve to further the goals of the organization.
Some components the assessor looks for are:

  • Is charity the primary objective?
  • Is the element of gift and giving present?
  • Is the organization incorporated and organized as nonprofit?
  • Is the charitable activity for the direct good or benefit of the community or public at large?
  • Is the charitable activity relieving a government burden?
  • Do patrons receive the same treatment regardless of ability to pay?
  • Are the doors open to the rich and poor alike without discrimination as to race, color, or creed?
  • Are donations accounted for separately?
  • Does the organization benefit, profit, or provide private advantage to founders, officers, or members?
  • How will assets of the corporation be distributed upon dissolution?

The county assessor examines the documents of each individual applicant and determines eligibility on a case-by-case basis.

How to Claim the Exemption

Applications must be filed on or before April 1 of the assessment year for which the exemption is requested. All real and personal property must be identified on the application.
If use of the property changes, or if the property is acquired after March 1 and before July 1, the application may be filed within 30 days of acquisition or change of use.
If the application is not filed on time it may be filed no later than December 31 if a late filing fee of (1) $200 or (2) one-tenth of 1 percent of the assessed value of the property, whichever is greater, accompanies the application.
It's not necessary to reapply each year. However, if ownership, occupancy, or use of the property changes, a new application must be filed. If a new application is not filed, the exemption will terminate.

Leased Property

It is possible for a qualified organization to claim a property tax exemption on real or personal property held under a lease. The lessee must occupy and use the property and provisions of the lease must qualify.

Example: A qualified organization acquires the use of property from a nonexempt property owner under a lease or lease-purchase agreement. The rent charged must reflect the savings that result from the property tax exemption. The assessor must be satisfied that the rent is actually less than market rent charged for similar properties.

To claim the exemption the lessee, not the owner, must file an application with the county assessor. All real or personal property must be identified on the application. Supplemental documents such as information about the institution or organization, and a copy of the lease are also required.

Filing Deadlines

Applications must be filed on or before April 1 of the assessment year for which the exemption is requested. If a lease is entered into after March 1 and before July 1, the claim must be filed within 30 days of entering the agreement.

If the application is not filed on time, it may be filed no later than December 31 if a late filing fee of (1) $200 or (2) one-tenth of 1 percent of the Real Market Value of the property, whichever is greater, accompanies the application.

The exemption shall apply to the assessment year for which the claim is filed and shall continue so long as the lease is in effect and the ownership and use of the property remains unchanged.

A new application must be filed when a new lease, an extension of the current lease, or any modification to the existing lease occurs, or upon a change in ownership or use. If a new application is not filed the exemption will terminate. If the lease ends before July 1, the exemption will terminate as of January 1 of the same year.

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