Or. Admin. Code § 123-623-2500

Current through Register Vol. 63, No. 11, November 1, 2024

Section 123-623-2500 - Starting SIP Period and Taxable Bases of Assessment & Taxation

(1) Under ORS 307.123(2)(c) the initial tax year for a period of Abatement occurs when:

(a) The total real market value of property comprising the Approved Project, as of the tax year's corresponding assessment date, exceeds the initial amount of the taxable portion according to section (4) or (5) of this rule; and

(b) On or before June 30 immediately preceding the tax year (even if after the assessment date):

(A) Property constituting the project has been exempted under ORS 307.330 for two years, regardless of paragraph (B) of this subsection; or

(B) In terms of primary commercial purposes consistent with specifically intended operations described in the Application, such property:

(i) Receives officially necessary but non-temporary certificate(s) of occupancy; or

(ii) Is being used or occupied or is fully ready for use or occupancy, including but not limited to producing finished goods or services, or intermediary outputs for the same, that are otherwise suitable and permissible for sale.

(2) Under ORS 307.123(2) and (3) for any tax year of an Abatement period, after it has begun:

(a) If the real market value of all project property, as of the tax year's corresponding assessment date, is equal to or less than that year's taxable portion amount according to section (4) or (5) of this rule, then all such property is subject to ad valorem taxes at its assessed value, for at least that year.

(b) Otherwise, only the assessed value of property comprising the taxable portion in section (3) of this rule is taxed, as the particular property would normally be taxable and have taxes levied on it.

(3) The county assessor shall assemble the taxable portion for each year of Abatement, by adding up particular property or portions of property that constitute the Approved Project-until their real market values as of the corresponding assessment date equal the respective amount in section (4) or (5) of this rule-in the following order:

(a) Any land acquired by the business firm;

(b) Any improvements to the land;

(c) Buildings or other structural improvements as newly acquired, constructed or reconstructed;

(d) New additions or modifications to a building or structure;

(e) Newly acquired or installed real property machinery and equipment; and

(f) Newly acquired or installed personal property.

(4) For purposes of any Approved Project in a rural area under ORS 307.123(2)(a)(B), the taxable portion amount is not adjusted by price indices, and it is:

(a) $25 million in the initial tax year of an Abatement by determination of the Commission before October 6, 2017, growing 3 percent per annum (compounded); or

(b) Otherwise based on Total Cost as of the corresponding assessment date for each tax year during the 15-year period of an Abatement, such that:

(A) In the initial tax year, the taxable portion equals the base amount respective to the threshold of Total Cost in section (6) of this rule;

(B) For each tax year over the remainder of the Abatement period:

(i) A significant increase or decrease in Total Cost will alter the respective base amount and cause the taxable portion to jump up or down accordingly; and

(ii) The taxable portion shall incorporate a 3-percent growth factor for each year of the period that has transpired-multiplying the respective base amount by 1.03 raised to the power of the Abatement year minus 1 (Example, base times 1.03⁴ in fifth year); and

(C) The Department will attempt to annually advise the applicable county assessor's office of a project's overall Total Cost, according to OAR 123-623-4100(2), as the county assessor or Department of Revenue may adjust according to property tax returns or other records.

(5) For purposes of any Urban Project under ORS 307.123(2)(a)(A):

(a) The amount of the taxable portion in the initial tax year of the Abatement is $100 million, except for subsection (b) of this section.

(b) If the Abatement begins in or after the 2026-2027 tax year, by determination of the Commission on or after September 24, 2023:

(A) The initial amount is a figure evenly divisible by $100,000 and closest to the product of $100 million multiplied by the greater of one or one plus the percent change between the December price level in:

(i) The CPI-U/W for 2024; and

(ii) The most recently available CPI-U/W.

(B) The Department will attempt to annually advise the Department of Revenue and county assessor's offices of the applicable amount, as computed according to this subsection, for Urban Projects expected to begin in the upcoming tax year.

(c) For each tax year over the remainder of the Abatement period, pursuant to subsection (a) or (b) of this section, the taxable portion amount grows 3 percent per annum (compounded).

(6) The base amount in section (4) of this rule for the taxable portion of Abatement in a rural area, by determination of the Commission:

(a) On or after October 6, 2017, but before September 24, 2023, equals:

(A) $25 million if Total Cost is less than $500 million;

(B) $50 million if Total Cost equals or exceeds $500 million up to $1 billion; and

(C) $100 million if Total Cost exceeds $1 billion.

(b) On or after September 24, 2023, equals:

(A) $40 million if Total Cost is less than $500 million;

(B) $75 million if Total Cost equals or exceeds $500 million up to $1 billion; and

(C) $150 million if Total Cost exceeds $1 billion.

Or. Admin. Code § 123-623-2500

OBDD 14-2024, adopt filed 06/10/2024, effective 6/10/2024

Statutory/Other Authority: ORS 285A.075 & 285C.615(7)

Statutes/Other Implemented: ORS 307.123