Waiver of Enterprise Zone Application for Authorization Filing Deadline Requirement
(1) The Department of Revenue will waive the application for authorization filing deadline requirement under ORS 285C.140(1) if:
(a) The taxpayer had knowledge of the enterprise zone property tax exemption program prior to initiating its investment, as shown by contacts made by the taxpayer with the Oregon Business Development Department (doing business as Business Oregon), the enterprise zone sponsor, the local zone manager or the county assessor; and
(b) The reason for the late submission of the application constitutes good and sufficient cause as defined in OAR 150-307-0500.
(2) In addition to the extraordinary circumstances identified in OAR 150-307-0500, good and sufficient cause may also include reasonable reliance on misinformation provided by enterprise zone sponsor personnel, local zone manager or Oregon Business Development Department (doing business as Business Oregon) personnel.
(3) The following is an example of a filing deadline waiver request that the Department of Revenue would grant:
Example: A company began meeting with the local zone manager in July 1999. The local zone manager assured the company that it would be authorized and that construction could proceed. The company was authorized in March 2000. Just prior to authorization in March 2000, during a physical inspection of the property, the county discovered that a building was already under construction. The company otherwise met the program criteria and filed a timely enterprise zone exemption claim.
Stat. Auth.: ORS 305.100, 285C.140 &
Stats. Implemented: ORS 285C.140
Hist.: RD 1-1995, f. 12-29-95, cert. ef. 12-31-95; REV 8-2000, f. & cert. ef. 8-3-00, Renumbered from 150-285.613(8); Renumbered from 150-285B.719(8), REV 12-2004, f. 12-29-04, cert. ef. 12-31-04; Renumbered from 150-285C.140(12), REV 21-2016, f. 8-10-16, cert. ef. 9-1-16
Enterprise Zone Statutory Definitions
(1) “Additions to existing buildings or structures” means an enlargement of building space including construction which creates additional floor space or which creates more building volume by raising a ceiling or roof and in the case of a structure includes, but is not limited to, increasing the area of a parking lot to provide additional parking spaces.
(2) “Building” means a real property improvement erected to stand more or less permanently, usually with walls and roof, and designed for human use and occupancy or as a shelter. Building includes, but is not limited to, warehouses and manufacturing plants. Building also includes all structural components necessary to make the building usable such as wiring, plumbing, a foundation, heating and cooling ducts.
(3) “Construction in progress” means after work begins or that the foundation for the building or structure was partially or wholly laid.
(a) Acceptable documentation means a letter from the contractor, a building official or someone else who is not an employee of the firm concerning when work began.
(b) “Beginning date after interruption” means:
(A) If work begins and then stops for six months or more and/or a new building permit is issued, the beginning date is when work is resumed.
(B) If a firm goes out of business, stops construction and sells the property, the beginning date is when work is undertaken by the new owner.
(C) When rebuilding after a fire, or some other natural disaster, work begins when construction starts, not upon starting demolition or cleanup.
(4) “Destination resort” as used in ORS 285C.135(5) means a facility with hotel accommodations at which visitors stay in order to access amenities connected to the resort, including but not limited to a development that satisfies the criteria under 197.435 to 197.467 for siting on certain lands and for limiting or allowing uses and activities in accordance with an acknowledged comprehensive plan.
(5) “Hotel or motel” as used in ORS 285C.135(5) and consistent with 699.005 means a facility that:
(a) Offers rooms, suites of rooms, cabins, houses or other such units for transient lodging to persons typically from beyond the local area through direct overnight rental, time-share arrangements or other types of limited transactions;
(b) May include one or more visitor-oriented services, facilities or recreational activities, including but not limited to restaurants, laundry, conference rooms, golf course, swimming pool, tennis courts, ski runs, marinas or bicycle paths; and
(c) May be commonly described or labeled as an inn, resort, convention center or by other such names.
(6) “Machinery and equipment” means any property used in the business activity or process except land, buildings and structures. It does not include furniture, commercial fixtures or structural components of a building such as standard wiring, plumbing, heating or cooling systems. Specialized pipes, air filtration systems, specialized wiring or other systems necessary for the manufacturing process are considered machinery and equipment rather than a structural component of a building. Machinery and equipment that is not easily movable is considered to be real property. Machinery and equipment that is readily movable is considered as personal property. “Readily movable” property is generally unattached in any way to a building or structure and also is not connected to other real property machinery and equipment. An example of “readily movable” property would be tools, testing equipment or a personal computer.
(7) “Modification” means to alter or change the elements of a property by modernization, renovation or remodeling.
(a) “Modernization” means to take corrective measures to bring a property into conformity with changes in style.
(b) “Renovation” means the process by which older structures or historic building are modernized, remodeled or restored.
(c) “Remodeling means a type of renovation that changes the basic plan, form or style of the property.
(8) “Personal or household use or consumption” means consumption normally undertaken by an end user and not by a business in the course of business operations.
(9) “Site preparation” means an activity carried on to prepare raw land for construction including fill, grading, leveling, installation of underground utilities and installation of utility connections.
(10) “Structure” means a real property improvement including ramps, loading docks, and parking surfaces. Structure does not include buildings.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 285C.180
Hist.: RD 9-1989, f. 12-18-89, cert. ef. 12-31-89; RD 6-1994, f. 12-15-94, cert. ef. 12-31-94, Renumbered from 150-284.115; RD 2-1997(Temp), f. & cert. ef. 9-15-97 thru 3-9-98; REV 8-2000, f. & cert. ef. 8-3-00, Renumbered from 150-285.570-(A); REV 9-2004 f. 2-29-04 cert. ef. 12-31-04, Renumbered from 150-285B.713; Renumbered from 150-285C.180, REV 21-2016, f. 8-10-16, cert. ef. 9-1-16
Commencement and Duration of Long-Term Nonurban Oregon Enterprise Zone Exemption
(1) For purposes of ORS 285C.409 and this rule, a facility is “in service” when a certified business has received a permit to occupy and use the building for its intended purpose.
(2) All real and personal property including improvements, machinery, and equipment newly located at the facility are exempt from ad valorem property tax for a minimum of seven and a maximum of 15 consecutive tax years. The period for the exemption commences with the first tax year for which the facility was placed in service as of the assessment date for that tax year. If there is no express written agreement between the certified business firm and the zone sponsor on the number of tax years for which the facility is to be exempt, the period for the exemption will be seven consecutive tax years.
(3) The following are examples of how to determine the tax year for which the exemption commences:
Example 1: The property for which the exemption is claimed was placed in service on November 15, 2002. The first assessment date after the property was placed in service is January 1, 2003. Therefore, the exemption commences with the 2003-04 tax year.
Example 2: The property for which the exemption is claimed was placed in service on February 15, 2003. The first assessment date after the property was placed in service is January 1, 2004. Therefore, the exemption commences with the 2004-05 tax year.
Stat. Auth.: ORS 305.100 & 285C.125
Stats. Implemented: ORS 285C.409
Hist.: REV 8-2000, f. & cert. ef. 8-3-00; Renumbered from 150-OL 1997, Ch 835, sec. 38, REV 12-2004, f. 12-29-04, cert. ef. 12-31-04; Renumbered from 150-285C.409, REV 21-2016, f. 8-10-16, cert. ef. 9-1-16
Assessor’s Action When A Long-Term Nonurban Oregon Enterprise Zone Facility is Disqualified
(1) Upon discovering that a certified business no longer qualifies for the property exemption under ORS 285C.409, the assessor must give written notice of exemption disqualification.
(2) The notice must include:
(a) A statement that the property is disqualified from the exemption for the following tax year,
(b) A statement explaining the reason for the disqualification,
(c) A calculation of the additional tax liability, and
(d) A statement that the additional tax liability will be added to the next general property tax roll.
(3) The additional tax liability must equal the taxes that would otherwise have been assessed against the disqualified property for each of the tax years the property was exempt under ORS 285C.409.
Stat. Auth.: ORS 305.100 & 285C.125
Stats. Implemented: ORS 285C.420
Hist.: REV 8-2000, f. & cert. ef. 8-3-00; Renumbered from 150-OL 1997, Ch 835, sec. 39, REV 12-2004, f. 12-29-04, cert. ef. 12-31-04; Renumbered from 150-285C.420, REV 21-2016, f. 8-10-16, cert. ef. 9-1-16
Criteria for Disqualification
(1) The county assessor will disqualify the facility of a certified business firm from exemption if the certified business firm does not begin operations and is not reasonably expected to begin operations. A decision of the assessor to disqualify the property from exemption must be based on one or more of the criteria listed in subsection (2). For purposes of this rule, the date that a facility “begins operations” is the date that the facility is placed in service, which, in turn, means the date a certified business has received a permit to occupy or use the facility for its intended purpose.
(2) In determining whether a facility should be disqualified because it has not begun operations and is not reasonably expected to begin operations, the county assessor must consider the following:
(a) Operations by the certified business firm have not started at the facility within 5 years from the date of starting construction or reconstruction of the facility unless otherwise specified in an agreement between the zone sponsor and the certified business firm;
(b) Two years have elapsed from the last date construction or reconstruction activity on the facility ceased;
(c) The certified business firm has notified the zone sponsor of the firm’s intent to cease construction or installation of facility property or improvements;
(d) The expected date the facility would first be placed in service, as specified on the Certification Application or a revised date specified in a written notice to the assessor and zone manager has elapsed;
(e) The certified business firm has declared bankruptcy or has ceased to exist;
(f) The certified business firm has notified the assessor and zone manager that the facility is inoperable.
Stat. Auth.: ORS 305.100, ORS 285C.420
Stats. Implemented: ORS 285C.420
Hist.: REV 4-2015, f. 12-23-15, cert. ef. 1-1-16; Renumbered from 150-285C.420-(A), REV 21-2016, f. 8-10-16, cert. ef. 9-1-16
State Archives • 800 Summer St. NE • Salem, OR 97310