Prospect Community Club v. Jackson County Assessor

CourtOregon Tax Court
DecidedJune 21, 2017
DocketTC-MD 160267R
StatusUnpublished

This text of Prospect Community Club v. Jackson County Assessor (Prospect Community Club v. Jackson County Assessor) is published on Counsel Stack Legal Research, covering Oregon Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Prospect Community Club v. Jackson County Assessor, (Or. Super. Ct. 2017).

Opinion

IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax

PROSPECT COMMUNITY CLUB, ) ) Plaintiff, ) TC-MD 160267R ) v. ) ) JACKSON COUNTY ASSESSOR, ) ) Defendant. ) FINAL DECISION1

Plaintiff appeals the denial of a property tax exemption for property identified as Account

10513560 (subject property) for the 2016-17 tax year. A trial was held in the Oregon Tax Court

on December 9, 2016. Jennifer E. Nicholls, attorney, represented Plaintiff. Susan Kiefer

(Kiefer) testified as a witness on behalf of Plaintiff. Judy Hanratty (Hanratty), exemption

specialist for the Jackson County Assessor’s Office, appeared and testified on behalf of

Defendant. Plaintiff’s Exhibits 1 through 11 were received without objection. Defendant’s

Exhibits B through E were received without objection. Defendant’s Exhibit A was received in

part after objection.

I. STATEMENT OF FACTS

Plaintiff is a community club in the unincorporated community of Prospect, Oregon,

which has a population of less than 1,000 people and is located in Jackson County. (Ptf’s Ex 11

at 3.) Plaintiff has been incorporated in Oregon since 1947, and the Internal Revenue Service

has recognized it as a 501(c)(3) organization, exempt from Federal income tax, since 2004.

(Ptf’s Ex 1 at 3; Ex 4 at 1.) Plaintiff’s 2004 amended Articles of Incorporation state that the 1 The court granted Plaintiff’s appeal in its Decision, entered May 23, 2017. That Decision is incorporated in this Final Decision. Plaintiff filed its Statement for Costs and Disbursements (Statement) on June 2, 2017, requesting an award of costs and disbursements totaling $334.85. Defendant did file a response to Plaintiff’s Statement. Upon consideration, the court grants Plaintiff’s request for costs and disbursements. See Tax Court Rule-Magistrate Division (TCR-MD) 16.

FINAL DECISION TC-MD 160267R 1 corporation “is organized exclusively for charitable, religious, educational, and scientific

purposes.”2 (Ptf’s Ex 2 at 1.) Plaintiff’s 2013 amended bylaws state that the corporation’s

purpose is to provide “a venue for the community to organize and develop educational and

recreational activities for adults and children.” (Ptf’s Ex 3 at 1.)

Plaintiff’s bylaws state that “membership in the corporation shall consist of all persons

eighteen (18) years of age or over residing or employed in the area serviced by the Prospect Post

Office.” (Ptf’s Ex. 3 at 4.) The bylaws require annual membership dues from each member. Id.

Kiefer testified that the dues are $5 per member. However, she testified that the club does not

actively collect dues and that the dues are not considered a significant source of revenue for the

club. Kiefer also stated that neither membership nor payment of membership dues is a

requirement to participate in Plaintiff’s activities or to use the subject property, a community hall

(“the Hall”). The benefit for members who pay dues is discounted rental rates, she stated. Of

the distinction between club members and members of the community at large, Kiefer testified

that “[s]ince everyone who’s a resident is technically a member of the club, it’s not entirely clear

to me how things work.”

Volunteers built the Hall in the 1950s to serve as a gathering place for community events.

(Ptf’s Ex. 8.) Kiefer testified that she is a member of Plaintiff’s organization and a volunteer at

the Hall. Kiefer testified that an old Prospect family donated the property for the Hall for the

2 Prospect’s articles of incorporation were amended in 2004, the same year that the corporation applied for and received its 501(c)(3) classification for federal tax exemption. Its original 1947 articles of incorporation, valid until 2004, stated that Prospect’s purpose was, in part, as follows:

“To become the official sponsor of, to sanction and promote educational pursuits of all kinds and to pursue charitable pursuits of any and all kinds and community recreation; to conduct social bazars, dances, entertainments of all kinds for the purpose of raising funds to be used in the said educational and charitable pursuits; to cultivate social intercourse among its members and to [illegible] the principles of charity, brotherly love, and fidelity, and to promote the welfare and enhance the welfare of its members. To promote the welfare of the community surrounding the town of Prospect, Oregon, and to promote all civic purposes which may be beneficial to the City of Prospect * * *.” (Ptf’s Ex 1 at 1.)

FINAL DECISION TC-MD 160267R 2 express purpose of becoming a community gathering place. Kiefer testified that the ownership

and operation of the Hall is Plaintiff’s primary activity, though the organization also hosts an

annual fundraising Prospect Jamboree and Timber Carnival off-site. Kiefer said that the Hall is

equipped with a recently renovated commercial kitchen, two restrooms, and storerooms, but that

it is otherwise much like a barn. She also testified that the building has a metal roof and no

insulation, and is in need of renovations.

Plaintiff regularly rents the Hall to individuals for private events such as weddings, baby

showers, birthday parties, club meetings, and other social gatherings. Plaintiff charges rental

fees ranging from $15 to $180, depending on the renter’s needs and historical precedents. (Ptf’s

Ex. 5.) Kiefer testified that there is no comparable facility in or near Prospect that is similarly

equipped and available for hosting events. Kiefer testified that about a year ago, she investigated

rental charges for halls in the area, and the nearest venue in Shady Grove charges $300 for a full

day rental. Kiefer testified that Plaintiff charges $75 for 12 hours for non-members and $50 for

members.

The Hall is frequently used at no cost for certain events, including funerals, memorial

services, and on one occasion, a fundraiser to benefit the family of a child diagnosed with cancer.

(Ptf’s Ex. 5.) The United States Department of Agriculture has used the Hall to present forest

fire information sessions, and the local library has hosted civic discussions there. (Id.; Ptf’s Ex

11 at ¶ 3.)

Plaintiff’s organization also uses the Hall for occasional meetings of its volunteer board.

(Ptf’s Ex. 5.) In addition, Kiefer testified, Plaintiff organization hosts its own events at the Hall,

including a weekly meal for senior citizens and special holiday dinners for Thanksgiving and

Christmas. Kiefer said volunteers prepare the meals, which are offered to the public for free, but

FINAL DECISION TC-MD 160267R 3 Plaintiff accepts donations from participants. Kiefer testified that Plaintiff never discriminates

based on race, color, or creed. Kiefer testified that advertisements for the meals are displayed at

the local post office and distributed to a voluntary email list, and that no one is turned away from

these meals due to an inability to donate. Kiefer testified that Plaintiff also offers monthly

dinners for families, and charges $7 or $8 per adult for those meals. Kiefer testified that any

receipts from meal fees or lunch donations are used to cover the costs of preparing the meals and

heating the poorly insulated building.

Kiefer testified that most of the money Plaintiff receives through rental fees, meal

donations, and fundraising efforts are used for operational expenses like utilities and

maintenance of the aging building, and that Plaintiff only raises funds “in order to continue to

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Prospect Community Club v. Jackson County Assessor, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prospect-community-club-v-jackson-county-assessor-ortc-2017.