IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax
RICHARD J. MURRAY, ) ) Plaintiff, ) TC-MD 180115R ) v. ) ) WASCO COUNTY ASSESSOR, ) ) Defendant. ) FINAL DECISION OF DISMISSAL1
This matter came before the court on Defendant’s Motion to Dismiss (Motion), contained
in its Answer, filed on May 9, 2018. Plaintiff filed a response on June 4, 2018, and Defendant
filed a supplemental reply on June 11, 2018. Because this case is at the pleadings stage “the
court assumes that all of the well-pleaded facts in [the] taxpayer’s complaint are true.” Buras v.
Dept. of Rev., 17 OTR 282, 284 (2004).
Plaintiff filed an appeal to the Wasco County Board of Property Tax Appeals (BOPTA)
seeking a reduction of the assessor’s real market value for account 14878 (subject property). In
an order mailed to Plaintiff on March 22, 2018, BOPTA reduced the real market value of the
subject property from $357,000 to $249,750 and sustained the assessed value at $250. (Compl at
3.) Plaintiff filed a timely appeal to this court seeking a reduction in real market value to
$10,250. (Id. at 1.)
In both its Answer and its supplemental reply Defendant requested dismissal of the case.
Defendant asserts that Plaintiff is not aggrieved as required by ORS 305.275(1) because Plaintiff
is only being taxed on his assessed value of $250 and a reduction of the real market value to
1 This Final Decision of Dismissal incorporates without change the court’s Decision of Dismissal, entered July 24, 2018. The court did not receive a statement of costs and disbursements within 14 days after its Decision of Dismissal was entered. See Tax Court Rule–Magistrate Division (TCR–MD) 16 C(1).
FINAL DECISION OF DISMISSAL TC-MD 180115R 1 $10,250 would not change Plaintiff’s tax obligation. Defendant cites Parks Westsac L.L.C. v.
Dept. of Rev., 15 OTR 50 (1999) and Kaady v. Dept. of Rev., 15 OTR 124 (2000), for the
proposition that taxpayers must be aggrieved and “have an immediate claim of wrong” to
maintain an appeal to the tax court. (Def’s Reply at 1 (quoting Kaady, 15 OTR at 125).)
Plaintiff filed a response to the Motion detailing a long history of disputes about the
subject property, most of which are outside the authority of this court to resolve. He then states,
“On May 8, 2018, * * * I received a notice of farm use disqualification. When that happens, the
Assessor can ask for back taxes based upon the value she puts on the property which could
involve a four figure penalty.” (Ptf’s Resp at 1.) As the court understands the situation,
Plaintiff’s assessed value is very low because it is under farm use special assessment. Further,
that special assessment is under review. Plaintiff’s concern is that if his property is disqualified
from farm use special assessment, additional taxes could be assessed based on the real market
value going back a number of years.2
ORS 305.275(1)3 requires a person appealing a property tax assessment to the tax court to
be “aggrieved by and affected by an act, omission, order or determination of * * * a county board
of property tax appeals * * * [or a] county assessor.” In Kaady, this court stated, “In requiring
that taxpayers be ‘aggrieved’ under ORS 305.275, the legislature intended that the taxpayer have
an immediate claim of wrong. It did not intend that taxpayers could require the expenditure of
public resources to litigate issues that might never arise.” Kaady, 15 OTR at 125. Thus, the
general rule followed by this court is that where a party seeks a change to the real market value
of a property and that change would not immediately change the tax obligation, the court will
2 ORS 308A.703 provides for further taxes owed upon disqualification from farm use special assessment. 3 References to the Oregon Revised Statutes (ORS) are to 2017.
FINAL DECISION OF DISMISSAL TC-MD 180115R 2 find a lack of aggrievement and dismiss the appeal.
This court has previously concluded that a taxpayer is not aggrieved by an assessor’s
determination of real market value while the property is under special assessment. See Hansen v.
Clackamas County Assessor, TC-MD 000646E, WL 1263921 (Or Tax Mag Div, Aug 8, 2000)
(taxpayer was not aggrieved by increase in real market value because property was under
forestland special assessment); Clackamas Co. v. Clackamas County Assessor, TC-MD
030868E, WL 22120735 at *2 (Or Tax M Div, Sept 4, 2003) (applying Hansen to property under
farmland special assessment); cf. Falls Apartments, L.L.C. v. Multnomah County Assessor, TC-
MD 160162N, WL 4167515 at *3 (Or Tax M Div, Aug 4, 2016) (relying on Clackamas Co. to
support conclusion that taxpayer could not appeal real market value while property was exempt
under construction in process program). The court in Hansen explained:
“[T]he [real] market value may have an impact on a future liability of taxpayers. However, whether the property becomes disqualified in the future is an uncertain event. The court cannot litigate all cases presenting potential harm. To do so would be a waste of judicial resources. Instead, the court only adjudicates matters that may result in immediate relief. Should the property be disqualified in the future, taxpayers may then challenge the values used to calculate the tax liability upon recapture. It is at that point taxpayers’ aggrievement comes to fruition.”
Hansen, 2000 WL 1263921 at *1.
In Seneca Sustainable Energy v. Lane County Assessor (Seneca), 21 OTR 366 (2014), the
Regular Division of this court articulated a narrow exception to the general rule that the relief
requested by a party must have some immediate effect on tax liability. In that case, the
taxpayer’s property was under an enterprise zone exemption which reduced their property taxes
to zero. Id. at 367. The Department of Revenue sought to dismiss the case on the basis that any
change to the real market value would not have an immediate impact on property taxes, and thus
FINAL DECISION OF DISMISSAL TC-MD 180115R 3 the taxpayer would not be aggrieved. Id. at 369. The court disagreed with the department and
stated:
“Although a determination by the department of [real market value] and [assessed value] of industrial property may not, in the year of determination, result in a tax assessment by reason of exemption qualification, the statutory scheme makes the determination of [real market value] and [assessed value] both potentially important and subject to challenge only in the year it is determined by the department. There is no statutory basis for a taxpayer to ‘wait and see’ if an appraisal in a particular year will or will not result in a later assessment of tax under ORS 285C.240.”
Seneca, 21 OTR at 370.
On its face the problem faced by Plaintiff is similar to the taxpayer in Seneca; however,
that case is distinguishable. The statutory scheme for the enterprise zone exemption, allows an
exemption of “100 percent of the assessed value of the qualified property in each of the tax years
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IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax
RICHARD J. MURRAY, ) ) Plaintiff, ) TC-MD 180115R ) v. ) ) WASCO COUNTY ASSESSOR, ) ) Defendant. ) FINAL DECISION OF DISMISSAL1
This matter came before the court on Defendant’s Motion to Dismiss (Motion), contained
in its Answer, filed on May 9, 2018. Plaintiff filed a response on June 4, 2018, and Defendant
filed a supplemental reply on June 11, 2018. Because this case is at the pleadings stage “the
court assumes that all of the well-pleaded facts in [the] taxpayer’s complaint are true.” Buras v.
Dept. of Rev., 17 OTR 282, 284 (2004).
Plaintiff filed an appeal to the Wasco County Board of Property Tax Appeals (BOPTA)
seeking a reduction of the assessor’s real market value for account 14878 (subject property). In
an order mailed to Plaintiff on March 22, 2018, BOPTA reduced the real market value of the
subject property from $357,000 to $249,750 and sustained the assessed value at $250. (Compl at
3.) Plaintiff filed a timely appeal to this court seeking a reduction in real market value to
$10,250. (Id. at 1.)
In both its Answer and its supplemental reply Defendant requested dismissal of the case.
Defendant asserts that Plaintiff is not aggrieved as required by ORS 305.275(1) because Plaintiff
is only being taxed on his assessed value of $250 and a reduction of the real market value to
1 This Final Decision of Dismissal incorporates without change the court’s Decision of Dismissal, entered July 24, 2018. The court did not receive a statement of costs and disbursements within 14 days after its Decision of Dismissal was entered. See Tax Court Rule–Magistrate Division (TCR–MD) 16 C(1).
FINAL DECISION OF DISMISSAL TC-MD 180115R 1 $10,250 would not change Plaintiff’s tax obligation. Defendant cites Parks Westsac L.L.C. v.
Dept. of Rev., 15 OTR 50 (1999) and Kaady v. Dept. of Rev., 15 OTR 124 (2000), for the
proposition that taxpayers must be aggrieved and “have an immediate claim of wrong” to
maintain an appeal to the tax court. (Def’s Reply at 1 (quoting Kaady, 15 OTR at 125).)
Plaintiff filed a response to the Motion detailing a long history of disputes about the
subject property, most of which are outside the authority of this court to resolve. He then states,
“On May 8, 2018, * * * I received a notice of farm use disqualification. When that happens, the
Assessor can ask for back taxes based upon the value she puts on the property which could
involve a four figure penalty.” (Ptf’s Resp at 1.) As the court understands the situation,
Plaintiff’s assessed value is very low because it is under farm use special assessment. Further,
that special assessment is under review. Plaintiff’s concern is that if his property is disqualified
from farm use special assessment, additional taxes could be assessed based on the real market
value going back a number of years.2
ORS 305.275(1)3 requires a person appealing a property tax assessment to the tax court to
be “aggrieved by and affected by an act, omission, order or determination of * * * a county board
of property tax appeals * * * [or a] county assessor.” In Kaady, this court stated, “In requiring
that taxpayers be ‘aggrieved’ under ORS 305.275, the legislature intended that the taxpayer have
an immediate claim of wrong. It did not intend that taxpayers could require the expenditure of
public resources to litigate issues that might never arise.” Kaady, 15 OTR at 125. Thus, the
general rule followed by this court is that where a party seeks a change to the real market value
of a property and that change would not immediately change the tax obligation, the court will
2 ORS 308A.703 provides for further taxes owed upon disqualification from farm use special assessment. 3 References to the Oregon Revised Statutes (ORS) are to 2017.
FINAL DECISION OF DISMISSAL TC-MD 180115R 2 find a lack of aggrievement and dismiss the appeal.
This court has previously concluded that a taxpayer is not aggrieved by an assessor’s
determination of real market value while the property is under special assessment. See Hansen v.
Clackamas County Assessor, TC-MD 000646E, WL 1263921 (Or Tax Mag Div, Aug 8, 2000)
(taxpayer was not aggrieved by increase in real market value because property was under
forestland special assessment); Clackamas Co. v. Clackamas County Assessor, TC-MD
030868E, WL 22120735 at *2 (Or Tax M Div, Sept 4, 2003) (applying Hansen to property under
farmland special assessment); cf. Falls Apartments, L.L.C. v. Multnomah County Assessor, TC-
MD 160162N, WL 4167515 at *3 (Or Tax M Div, Aug 4, 2016) (relying on Clackamas Co. to
support conclusion that taxpayer could not appeal real market value while property was exempt
under construction in process program). The court in Hansen explained:
“[T]he [real] market value may have an impact on a future liability of taxpayers. However, whether the property becomes disqualified in the future is an uncertain event. The court cannot litigate all cases presenting potential harm. To do so would be a waste of judicial resources. Instead, the court only adjudicates matters that may result in immediate relief. Should the property be disqualified in the future, taxpayers may then challenge the values used to calculate the tax liability upon recapture. It is at that point taxpayers’ aggrievement comes to fruition.”
Hansen, 2000 WL 1263921 at *1.
In Seneca Sustainable Energy v. Lane County Assessor (Seneca), 21 OTR 366 (2014), the
Regular Division of this court articulated a narrow exception to the general rule that the relief
requested by a party must have some immediate effect on tax liability. In that case, the
taxpayer’s property was under an enterprise zone exemption which reduced their property taxes
to zero. Id. at 367. The Department of Revenue sought to dismiss the case on the basis that any
change to the real market value would not have an immediate impact on property taxes, and thus
FINAL DECISION OF DISMISSAL TC-MD 180115R 3 the taxpayer would not be aggrieved. Id. at 369. The court disagreed with the department and
stated:
“Although a determination by the department of [real market value] and [assessed value] of industrial property may not, in the year of determination, result in a tax assessment by reason of exemption qualification, the statutory scheme makes the determination of [real market value] and [assessed value] both potentially important and subject to challenge only in the year it is determined by the department. There is no statutory basis for a taxpayer to ‘wait and see’ if an appraisal in a particular year will or will not result in a later assessment of tax under ORS 285C.240.”
Seneca, 21 OTR at 370.
On its face the problem faced by Plaintiff is similar to the taxpayer in Seneca; however,
that case is distinguishable. The statutory scheme for the enterprise zone exemption, allows an
exemption of “100 percent of the assessed value of the qualified property in each of the tax years
for which the exemption is available.” ORS 285C.175(3)(a). The assessor is required to enter
on the roll the assessed value and the “amount of additional taxes that would be due if the
property were not exempt.” ORS 285C.175(7). If the property is disqualified, the assessor must
assess “100 percent of the additional taxes calculated under ORS 285C.175 against the property
for each year for which the property had been granted exemption under ORS 285C.175.” ORS
285C.240(3)(a)(B).
The statutory scheme for farm use special assessment is different than the enterprise zone
exemption. In farm use special assessment, the assessor must enter a notation on the roll stating
“potential additional taxes,” but the assessor does not calculate the additional taxes until after the
property has been disqualified. ORS 308A.083; ORS 308A.703. Additional taxes are calculated
for a period of up to five years before the disqualification in some cases, and up to ten years in
other cases. See ORS 308A.703(3). Consequently, whether the real market value from a given
tax year will be used in the additional tax calculation cannot be known until the property is
FINAL DECISION OF DISMISSAL TC-MD 180115R 4 disqualified because, in many cases, some tax years will fall beyond the five- or ten-year
lookback period.
Under both statutory schemes, whether the property is disqualified in the future will
always be an uncertain event. However, the enterprise zone exemption statutes require the
assessor to calculate and enter on the roll the amount of tax that will be assessed against the
property if it is disqualified. The same cannot be said for farm use special assessment. Whether
a given tax year will be relevant to the additional tax calculation will not be known until the
property is disqualified and the assessor determines the appropriate lookback period. Because of
that distinction, the court concludes that the holding of Seneca does not apply to this case.
ORS 308A.718(3) requires a county to notify taxpayers of a disqualification of their
property from farm use special assessment. A taxpayer then has ninety days to appeal that
determination. ORS 308A.718(4); ORS 305.280(1). When Plaintiff’s property is disqualified
from farm use special assessment, and an assessment made, he could appeal all of the years taxed
in the lookback period because he would then be “a person aggrieved by an act, omission, order
or determination” of the county assessor. ORS 305.275(1); see also Thomas v. Yamhill County
Assessor, TC-MD 001095B, WL 36205439 at 2* (Or Tax M Div, Feb 26, 2001) (directing
assessor to recalculate additional taxes after disqualification based on lower real market value).
Since the potential disqualification from farm use special assessment has not occurred, Plaintiff’s
tax obligation remains theoretical. Thus, at the time Plaintiff filed the Complaint he was not
aggrieved and did not have standing to appeal his property tax assessment. Now, therefore,
///
FINAL DECISION OF DISMISSAL TC-MD 180115R 5 IT IS ORDERED that Defendant’s Motion to Dismiss is granted and Plaintiff’s appeal is
dismissed.
Dated this day of August 2018.
RICHARD DAVIS MAGISTRATE
If you want to appeal this Final Decision of Dismissal, file a complaint in the Regular Division of the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563; or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your complaint must be submitted within 60 days after the date of the Final Decision of Dismissal or this Final Decision of Dismissal cannot be changed. TCR-MD 19 B.
This document was signed by Magistrate Davis and entered on August 14, 2018.
FINAL DECISION OF DISMISSAL TC-MD 180115R 6