Department of Revenue
Chapter 150
Division 307
PROPERTY SUBJECT TO TAXATION
150-307-0920
Long Term Rental Agreements
(1) Definitions set forth in ORS 307.870 are incorporated herein by reference.
(2) For purposes of this rule, “rental agreement” means an agreement between a qualified heavy equipment rental provider and a renter for the use of qualified heavy equipment for a single defined term of less than 365 consecutive days, an open-ended term, or an undefined term. When determining the length of a rental agreement, each term and any extensions or amendments extending the agreement beyond the initial term are considered separately.
(3) Qualified heavy equipment rented for a single defined term of 365 consecutive days or more is not subject to the heavy equipment rental tax and, therefore, no longer qualifies for the exemption from ad valorem property tax provided in ORS 307.872.
(a) The qualified heavy equipment rental provider must notify the County Assessor according to ORS 308.290 and ORS 311.410. The heavy equipment must be added to the property tax rolls.
(b) Any qualified heavy equipment rented under an agreement for a defined term of 365 consecutive days or more on July 1 is subject to ad valorem property tax as provided by ORS 311.410(1).
Example 1: DCA Heavy Equipment Rental Company rents a bulldozer under a six-month rental agreement. The rental agreement is subsequently extended for a second term of seven months. Each term is considered separately. As neither the initial six-month term, nor the second seven-month term add up to 365 or more consecutive days, the equipment rented under the agreement is subject to the rental tax.
Example 2: DCA Heavy Equipment Rental Company rents a bulldozer from their Jackson County location. The bulldozer is rented under a rental agreement with an initial term of six months. The rental agreement is subsequently extended for a second term of two years. Each term is considered separately. The initial term of six months is subject to the rental tax. The second term of two years is exempt from the heavy equipment rental tax. DCA Heavy Equipment Rental Company must notify the Assessor according to ORS 308.290 and ORS 311.410 that the bulldozer has been rented for a single defined term of two years, and is no longer exempt from ad valorem property tax.
Statutory/Other Authority: ORS 305.100 & 307.872
Statutes/Other Implemented: ORS 307.872
History:
REV 8-2020, minor correction filed 04/20/2020, effective 04/20/2020
REV 30-2018, adopt filed 12/28/2018, effective 01/01/2019