Oregon Business Development Department
Chapter 123
Division 674
STANDARD EXEMPTION ON TAXABLE ENTERPRISE ZONE PROPERTY
123-674-5000
QUALIFIED PROPERTY— Critical Terms
As used in 285C.050 to 285C.250 and in this division of administrative rules, consistent with relevant definitions in ORS Chapter 307 and OAR 150-285-3200, unless the context dictates otherwise:
(1) Addition includes one or both of the following as indicated by the context:
(a) The re-construction of an existing building or structure to expand or enlarge its area, volume, dimensions or structural capacity; or
(b) The newly erected or created space, enclosure or annex of the building or structure, pursuant to the re/construction described in subsection (a) of this section.
(2) Building includes a real property improvement erected on the land, mostly enclosed by walls and roofing, and designed for human use, occupancy or shelter, along with structural components necessary to make the building usable and habitable such as wiring, plumbing, foundation, fixtures, lighting and heating and cooling system.
(3) Commercial relates to the principal undertaking by a qualified business firm in the direct furtherance of the production of income through the handling, making or provision of goods, products or services for ultimate (though not typically direct) sale.
(4) Completion of construction, addition, modification or installation has the same meaning as placing property ‘in service’ under ORS 285C.050(11), in that the property is legally and physically ready for commercial operations as specifically intended, following interconnected installations, testing or proving of safety, information and other systems essential to produce saleable output, as well as necessary occupancy or other permits. Excluded are training of personnel and other similarly intangible activities or managerial issues, however critical they might be for business operations in general.
(5) Cost means expenses documentable through existing records or retrospective compilation of evidence as incurred for:
(a) Construction, reconstruction, modification or installation of qualified property, including but not limited to materials, supplies, labor, paint, contractor charges, equipment usage, engineering, architectural fees, building or land use permits and associated legal costs, and physical connections to utilities and other property, but excluding the costs of maintenance, financing, atypical legal fees, off-site improvements, the authorized business firm’s own management and so forth; or
(b) Purchase of real or personal property machinery & equipment or of ready-made buildings or structures directly prior to installation or occupancy. Estimated fair market value shall substitute for purchase price in the case of existing property, for which there has not been a recent sale (for example, leasing of used property).
(6) Installation is the actual placement, affixing, connection or integration of machinery & equipment or personal property in or with a building, structure or other machinery & equipment for purposes of being used and does not mean the purchase, onsite delivery or storage of such property.
(7) Item, subject to further definition in OAR chapter 150 under ORS 285C.185(6)(b), includes any personal property that may be effectively appraised or assessed as a unit, including but not limited to an entire conveyance, information or other system, the various components of which are mechanically, electrically or similarly integrated.
(8) Land includes raw undeveloped land and any improvements to the land for site development.
(9) Located in/inside the enterprise zone means the use or operation of qualified property for trade or business operations within the current boundary of the enterprise zone, from which it is not removed during the standard exemption period other than incidental or temporary reasons of repair, maintenance and so forth.
(10) Modification under ORS 285C.050 comprises:
(a) Reconditioning, refurbishment, retrofitting or upgrading of real property machinery & equipment for purposes of ORS 285C.190; or
(b) The alteration or reconstruction of all or part of an existing building or structure, as distinct from an addition to the building or structure.
(11) Personal property includes any tangible property (readily movable as opposed to effectively fixed or very heavy) that is used in the business process or activity and is otherwise subject to ad valorem taxation, including but not limited to devices, tools and (former) spare parts that are put to use (see OAR 123-674-5200).
(12) Production of tangible goods means any physical process or manipulation of materials, commodities or products, including but not limited to manufacturing, assembly, sorting, cooking, heating, freezing, mixing, sorting, wrapping, onsite conveyance, packaging or bulk printing.
(13) Real property machinery & equipment (fixed or stationary in contrast to personal property due to weight, size or attachment to or integration with other real property) is real property used in the business process or activity and not otherwise described in this rule, including but not limited to major machines, specialized pipes, air filtration systems, wiring, electrical panels or switches, or other non-structural, assembled apparatuses. (This type of property may be classified as ‘tangible personal property’ for income tax or other purposes)
(14) Structure includes a real property improvement on or under the land other than buildings, machinery or equipment, including but not limited to ramps, docks, parking lots, outdoor freestanding signs, subterranean compartments and outdoor lighting, as well as associated fixtures, paving, wiring, pipes, foundations and so forth.
Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.050 – 285C.250
History:
OBDD 15-2017, minor correction filed 12/28/2017, effective 12/28/2017
OBDD 7-2017, amend filed 11/29/2017, effective 11/29/2017
OBDD 14-2016, f. & cert. ef. 9-16-16
OBDD 27-2010, f. & cert. ef. 6-14-10