February 10, 2017
The Oregon State Department of Revenue, League of Oregon Cities and individual county tax assessors have launched several initiatives over the past two years to change the legislative intent of specific statutes relating to nonprofit property taxes. In work groups of the legislature last year, piecemeal legislation over decades has been noted as a rationale for an effort to research and refine existing statues on nonprofit property tax exemptions.
Several court cases were filed last year by charitable benefit organizations who were determined by a county tax assessor to not meet the requirements of exemption, even though they had in previous years. Currently there are five identified bills under consideration at the Oregon legislature related to nonprofit property tax issues including: SB149, SB181, HB2047, HB2052, and HB2115. As is often the case, some of these bills create special carve-outs for sub-sectors potentially contradicting each other.
Here is a summary breakdown of each:
SB149: Provides that property of limited liability company qualifies for property tax exemption or special assessment if limited liability company is wholly owned by nonprofit corporations or public bodies and property, if held directly by owners of limited liability company, would qualify for such exemption or special assessment.
SB181: Requires certain institutions seeking property tax exemption to file information return that states basis for exemption claim in terms derived from Oregon case law.
HB2047: Exempts from taxation real property of nonprofit health clinic that is occupied or used to provide health services, or administrative services necessary to provide such health services, and is either federally qualified health center or occupied or used to serve specified low-income or needy patients.
HB2052: Directs Legislative Revenue Officer to study exemption from ad valorem property taxation of property of nonprofit corporations.
HB2115: Specifies requirements for property of nonprofit hospitals and nonprofit health systems to be exempt from taxation.
NAO believes that state and local laws on property and tax exemptions should be simplified where possible to ensure a wide range of nonprofits are eligible and can satisfy reporting requirements without undue burdens.
NAO is assessing these bills to determine the effects that they may have on charitable nonprofits and is preparing to fight for your rights as the backbone organizations of our society!