Or. Admin. R. 150-307-0430 - Exemption of Buildings, Structures and Machinery or Equipment during Construction
(1)
Definitions for purposes of ORS
307.330 and this rule:
(a) "Addition" means any enlargement of an
existing building or structure. This includes the construction of additional
stories or the erection of a new wing on an existing building.
(b) "Building" means all real property
improvements erected upon the land such as hotels, office buildings, retail
stores, condominiums and manufacturing plants and includes heating and
ventilating systems, elevators, and similar equipment normally installed as
part of the building construction.
(c) "Completed" means the building, structure
or addition is ready for its intended use or occupancy.
(d) "In the process of construction" means
that construction of the new building, structure or addition has begun, but is
not yet completed, and typically the foundation is partially or wholly laid.
Site preparation or demolition of an existing building or structure is not
considered part of the construction process.
(e) "In use or occupancy" means the property
is being utilized in the manner for which the completed building, structure or
addition was intended.
(f) "Land"
means land in its natural state and includes site development such as fill,
excavation, grading and leveling.
(g) "Machinery or equipment" includes
machinery or equipment housed within the building, structure or addition for
the purpose of manufacturing or otherwise processing raw or finished materials.
(h) "Modernization" means to take
corrective measures to bring a property into conformity with changes in style.
(i) "Structure" means all real
property improvements, other than buildings, and includes improvements such as
ramps, loading docks, wharfs, and paved areas used for parking or storage.
(j) "Testing" means a limited
trial production run as a check of equipment and system performance, but does
not include the processing of a substantial quantity of finished and marketable
products that are, or can be, sold through the usual channels of trade.
(2) Property eligible
for exemption:
(a) New building, structure or
addition to an existing building or structure that is in the process of
construction on January 1 of each assessment year in which exemption is
claimed. The building, structure or addition must be intended primarily for the
furtherance of the production of income, whether from a one-time sale of
property or an ongoing stream of income. For example, a new condominium project
being constructed for future sale to purchasers, who may live on the property
or rent the property to others, will qualify for exemption.
(b) Machinery or equipment located at the
construction site or installed in or affixed to a building, structure or
addition. Testing of equipment is allowable during the period of construction.
(c) All personal property that
would qualify as real property under OAR 150-307.010(1) that is situated at the
place of construction on January 1 of each assessment year in which exemption
is claimed.
(3)
Manufacturing facilities may claim exemption for no more than two consecutive
years. Conditions for exemption must exist on January 1 of each assessment year
in which exemption is claimed.
(4)
Property not eligible for exemption:
(a)
Land.
(b) Modernization of an
existing building or structure.
(c) Heating equipment, elevators, ventilating
systems and similar equipment installed in a building after its original
construction.
(d) Property
constructed for residential occupancy by the owner.
(e) Nonmanufacturing facilities, of any kind,
completed less than one year from the date construction began.
(5) No exemption may be allowed if
use or occupancy is made of the building, structure or addition, or any part
thereof, on or before January 1 of any assessment year in which exemption is
claimed.
(a) If the building, structure or
addition is completed and ready for use or occupancy on January 1, although not
in use, it is taxable.
(b) If the
building, structure or addition is completed and leased on January 1, but not
occupied by the lessee, it is taxable.
Notes
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 307.330
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