IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax
VEDANTA SOCIETY OF PORTLAND, ) OREGON, ) ) Plaintiff, ) TC-MD 140420N ) v. ) ) MULTNOMAH COUNTY ASSESSOR, ) ) Defendant. ) FINAL DECISION
This Final Decision incorporates without change the court’s Decision, entered on
May 26, 2015. The court did not receive a statement of costs and disbursements within 14 days
after its Decision was entered. See Tax Court Rule-Magistrate Division 16 C(1).
Plaintiff appeals Defendant’s denial of property tax exemption for property identified as
Account R300249 (subject property) for the 2014-15 tax year. A trial was held in the Oregon
Tax Courtroom on February 9, 2015, in Salem, Oregon. Joseph D. McDonald, Attorney at Law,
appeared on behalf of Plaintiff. Swami Shantarupananda (Swami) and Dr. Terrance Hohner
(Hohner), Plaintiff’s Vice President, testified on behalf of Plaintiff. Lindsay Kandra, Assistant
County Attorney for Multnomah County, appeared on behalf of Defendant. Karla Hartenberger
(Hartenberger), tax exemption specialist and appraiser, testified on behalf of Defendant.
Plaintiff’s Exhibits 1 through 6 were received without objection. Defendant’s Exhibits A and B
were received without objection.
I. STATEMENT OF FACTS
The subject property consists of “a residential lot with an area of 7,483 square feet [that]
is improved by a single story house with a basement[.]” (Stip facts at 2.) The main floor of the
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FINAL DECISION TC-MD 140420N 1 subject property “has an area of 1,118 square feet * * *.” (Id.) The subject property also
includes a detached garage with an area of 322 square feet. (Id.)
The subject property is owned by the Vedanta Society of Portland. Swami testified that
he belongs to the Ramakrishna Order of India. “[B]ranches of the Ramakrishna Order located
outside India are generally known as Vedanta Societies[.]” (Ptf’s Ex 5 at 1.) Swami testified
that Vedanta Societies are located around the world and there are more than twenty located in the
United States. (see also id.) Swami testified that Vedanta is one of the oldest religions in the
world and is a type of reformed Hinduism that is universal, instead of based only on Indian
culture and tradition. (See also Ptf’s Ex 4 at 1.) Swami testified that the three principles of
Vedanta are “the divinity of the soul,” “the goal of human life is to manifest our divinity,” and
“[t]ruth is [o]ne.” (See id.)
The parties agree that Plaintiff is a “religious organization” as that term is used in Oregon
Administrative Rule (OAR) 150-307.140(1)(a). (Stip Facts at 1, ¶ 1.) Swami testified that he
has been the spiritual leader for Plaintiff since 1991. Swami also testified that he is considered a
monk because he does not take a salary from Plaintiff. Swami testified that Plaintiff currently
has about 250 members; Plaintiff also has devotees, who are not members.
Swami testified that Plaintiff owns three properties: the subject property, the main temple
in Portland, and a retreat in Scappoose. (See Ptf’s Ex 6 at 3, 7.) Swami and Hohner both
testified Plaintiff purchased the subject property, known as Holy Mother’s House, in 1981. (See
id. at 7.) Swami testified that other Vedanta Societies in the United States have a house similar
to the subject property. Swami testified that the religion has no written doctrine or document
requiring a house such as the subject property. Swami testified that the subject property was
dedicated by Swami Aseshananda (Aseshananda), who is considered a holy man by Plaintiff.
FINAL DECISION TC-MD 140420N 2 Hohner testified that Aseshananda was “the last living disciple of Holy Mother” and that Plaintiff
considers Holy Mother a “divine incarnation, equivalent to Christ in the Christian tradition.”
Hohner testified that as Aseshananda was getting older, more visitors were coming for holy
company and to be initiated by him, so Aseshananda set up the subject property “as a spiritual
refuge” for the visitors’ “spiritual benefit.”
Swami testified that someone has resided in the subject property since Plaintiff purchased
it. Swami testified that the current caretakers residing at the subject property are husband and
wife Toby Pollock (Pollock) and Miriam Poston (Poston). Hohner testified that Pollock and
Poston have lived in the subject property since 2008. (See also Pollock Decl at 1.) Hohner
testified that Pollock and Poston have no written contract with Plaintiff to stay in the subject
property, “they do it out of their spirit of service.” (See id. at 2.) Hohner testified that Pollock
and Poston pay utilities, receive mail, and have infrequent visits from family members. (See also
id.) Poston and Pollock do not host personal events, entertain friends, or have personal overnight
guests. (Id.)
Swami described Pollock and Poston as pilgrims, testifying that they live at the subject
property in order to live “deeply spiritual lives”; they “are exactly like monastics without taking
formal vows,” and “want to render their services” to the temple and to the guests visiting from
around the world. Swami testified that the caretakers and guests participate in meditation, cut
flowers for offerings, read and discuss scriptures, and watch religious movies. Swami testified
that Plaintiff needs Pollock and Poston to reside at the subject property because Aseshananda
dedicated the property and Plaintiff does not want it exposed to theft and vandalism.
Hohner testified that the main floor of the subject property consists of a shrine room, two
guest bedrooms, the caretakers’ bedroom, a kitchen, and a bathroom. (See also Ptf’s Ex 1.)
FINAL DECISION TC-MD 140420N 3 Hohner testified that the guest bedrooms are used solely by Plaintiff’s overnight guests. He
testified that the shrine room is the “essence of Holy Mother’s House” and occupies the space
that would be the living room in a typical house. Hohner testified that the shrine room is not
used for any “secular acts,” instead it is used for a “spiritual purpose.” He testified the shrine
room is used for meditation, spiritual readings, singing, and offering food, flowers, and service.
Hohner testified that the shrine room contains what is similar to an altar in the Catholic Church.
He testified that Aseshananda installed and dedicated the shrine, which includes pictures of Holy
Mother and Swami Krishna.
Hohner testified that the basement consists of a bathroom, a music/storage room, a
storage room for tools and supplies, a furnace/utility room, and a small office. (See also Ptf’s Ex
2.) Hohner testified that the music/storage room is used by guests to watch religious videos and
is used by Pollock to compose music used in Plaintiff’s worship services. Hohner testified that
the small office is used by Poston for faxing and computer work. Hartenberger testified that the
caretakers used the small office for personal use, not for conducting Plaintiff’s business.
Hohner testified that the subject property also has a combination garden shop and garage
where Poston parks her car. (See also Ptf’s Ex 3.) He testified that the yard has apples and
vegetables used as food for guests and as offerings in the temple. (See also id.) Hohner testified
that the yard has roses planted by Aseshananda and devotees. He testified that “Holy Mother
loved flowers - especially roses”; the subject property’s roses have “significance to the worship
[] in the shrine room,” where they are offered every day they are flowering and are also used at
the main temple and the Scappoose retreat. A photo of the shrine room shows multiple roses
lying on top of the shrine. (Def’s Ex A at 2.) Hohner testified that guests weed the garden,
which is considered “karmic yoga.”
FINAL DECISION TC-MD 140420N 4 Swami testified that even though the subject property looks like a house, he does not call
it a house; instead, he calls it a “place of pilgrimage,” a “religious retreat,” and a “center of
worship.” Swami testified that the subject property is used by members for “holy company,”
which occurs once a month and involves meditation, scripture reading, singing, and a question
and answer session. Swami testified that holy company is also known as “teacher and student
relations” and is “the most important part of Eastern mysticism.”
Swami testified that only members and devotees can stay at the subject property and
those guests come from all over the world to stay at the subject property and provide service.
Hohner testified that from February 11, 2014, to January 19, 2015, 13 overnight guests stayed at
the subject property. He testified that guests usually stay for up to a week. Swami testified that
the guests can afford to stay at hotels, but choose to stay at the subject property because they
prefer the austerity and want to experience the “ambiance of the spiritual vibrations.” Swami
testified that visiting swamis stay at the main temple, but also visit the subject property. Hohner
testified that eight swamis made pilgrimages from India to the subject property in 2014.
Defendant exempted a portion of the subject property beginning with the 1982-83 tax
year. (Stip Facts at 2.) Hartenberger testified that the subject property should not be partially
exempt because she believes its primary use is residential. She testified that she performed an
“analysis based on use.” Hartenberger identified the shrine room and two guest bedrooms “as
possibly having exclusive [religious] use.” (Def’s Ex A at 1.) She testified that she “came up
with approximately sixty-five percent for residential use and thirty-five percent” for religious
use. (See id.) Hartenberger testified that she also calculated primary use based on “the amount
of time—frequency—that they used the [subject] property.” She testified that the subject
FINAL DECISION TC-MD 140420N 5 property was used one week per month for religious use and she concluded “residential use was
76.92 percent and religious use was 23.08” percent. (See id.)
II. ANALYSIS
The issue presented in this case is whether the subject property should be exempt from
property taxation under ORS 307.140.1 That statute exempts from taxation:
“(1) All houses of public worship and other additional buildings and property used solely for administration, education, literary, benevolent, charitable, entertainment and recreational purposes by religious organizations, the lots on which they are situated, and the pews, slips and furniture therein. However, any part of any house of public worship or other additional buildings or property which is kept or used as a store or shop or for any purpose other than those stated in this section shall be assessed and taxed the same as other taxable property.”
ORS 307.140.
Exemption statutes are strictly but reasonably construed. German Apost. Christ.
Church v. Dept. of Rev. (German Apost. Christ. Church), 279 Or 637, 640, 569 P2d 596 (1977).
“Strict but reasonable means merely that the statute will be construed reasonably to ascertain the
legislative intent, but in case of doubt will be construed against the taxpayer.” Id., quoting
Eman. Luth. Char. Bd. v. Dept. of Rev., 263 Or 287, 291, 502 P2d 251 (1972). “In close cases,
exemptions must be denied.” Washington Co. Assessor II v. Jehovah’s Witnesses (Wash. County
Assessor II), 18 OTR 409, 422 (2006). “The burden is upon the taxpayer to prove that a claim of
exemption meets the statutory requirements.” Golden Writ of God v. Dept. of Rev., 300 Or 479,
483, 713 P2d 605 (1986); see ORS 305.427.
The Oregon Supreme Court established a two-part test to determine whether a religious
organization’s property is exempt from taxation under ORS 307.140. German Apost. Christ.
Church, 279 Or at 642. The first part of the test is “if the charitable use is the advancement of
1 The court’s references to the Oregon Revised Statutes (ORS) are to 2013.
FINAL DECISION TC-MD 140420N 6 religion, then such use must be primarily for the benefit of the church * * *.” Id. In order to
primarily benefit the church, “the primary use of the property must advance charitable purposes
or goals of the religious organization.” Id. The Regular Division of this court observed that
“those cases holding property exempt involved situations in which the property was used
primarily or essentially for religious objectives, with only incidental benefit to the persons using
the property.” Washington Co. Assessor II, 18 OTR at 418.
The second part of the German Apost. Christ. Church test is that the religious use of
property be “reasonably necessary for the furthering of the religious aims of the church.”
German Apost. Christ. Church, 279 Or at 642. The Regular Division of this court determined
that, under the second part of the test, “cases fall into two categories: those cases involving
residences and those not involving residences.” Washington Co. Assessor II, 18 OTR at 418. In
cases not involving residences, “so long as the use of the property related primarily to church
business, the property was held exempt.” Id. (Citations omitted.) In cases involving residences,
the properties “have been held exempt only when two requirements are met”: (1) “the official
living in the residence must be required to live there by either church doctrine or practical
necessity[;]” and (2) “the proximity of the residence to the house of worship must be necessary
to further religious objectives.” Id. at 418-19.
The fact that the subject property is a residential structure is not dispositive as to whether
it was a “residence” within the meaning of Washington Co. Assessor II. See, e.g., Christian
Meeting Place v. Washington County Assessor, TC-MD No 021173C, WL 22119848 at *4 (Sept
2, 2003) (holding exempt a residential structure that was used exclusively for qualifying religious
activities, but noting that “[t]he result would likely be otherwise * * * if one or more church
FINAL DECISION TC-MD 140420N 7 members were living on the property”). Thus, the court’s focus is on the use of the subject
property rather than the fact that it is a residential structure.
A. Whether the Subject Property Was Used Primarily for the Benefit of Plaintiff
The first question is whether all or parts of the subject property were used primarily for
Plaintiff’s benefit.
Swami described the subject property as a “religious retreat”; thus, cases involving
religious retreats provide helpful comparisons. In Found. of Human Understanding v. Dept. of
Rev., 301 Or 254, 266 (1986), a ranch was used as a retreat to provide “religious activities, which
include work therapy, counseling, individual spiritual examination and meditation.” In that case,
the court also examined two other parcels of land owned by the organization: (1) several acres
containing “a residence, barn, and detached garage with workshop[,]” and (2) a church with a
caretaker’s residence. Id. at 256-57. The Oregon Supreme Court held that the ranch was exempt
from taxation, except for the portions used for the sale of merchandise and specially assessed for
forest uses. Id. at 267. In the same case, a property “used by the counselors as a respite from
retreatants” was not exempt from taxation because it benefitted “the employees directly and the
organization only indirectly,” thus failing the first part of the test. Id. at 264.
In a case where this court held a church camp exempt from taxation, the court found that
“[t]here is ample evidence that meditation and individual private spiritual examination in a rural
environment are religious activities of the Camp.” Church of the Brethren v. Coos County
Assessor (Church of Brethren), TC-MD No 990512D, WL 33117384 at *3 (Dec 17, 1999). This
court concluded “that such activities are sufficient to qualify property for exemption.” Id., citing
Found. of Human Understanding, 301 Or at 266.
FINAL DECISION TC-MD 140420N 8 In the present case, the shrine room was used exclusively by Plaintiff’s members and
devotees for religious activities including meditation, group and individual spiritual examination,
reading and discussing scriptures and sharing holy company with visiting swamies. In 2014,
eight swamis visited the shrine room. Those are the same types of activities that took place and
qualified properties for exemptions in Found. of Human Understanding and Church of Brethren.
The court concludes that the shrine room was used primarily to advance Plaintiff’s religious
objective.
The two guest bedrooms were used exclusively by members and devotees who visited the
property to participate in religious activities. Hohner testified that, in 2014, 13 guests stayed
overnight at the subject property. In addition, he testified that the caretakers had no personal
overnight visitors to the subject property. That use by members and devotees shows the primary
use of the guest bedrooms was for the benefit of Plaintiff, not for the personal benefit of the
caretakers.
The rose beds in the subject property’s yard were planted by devotees and Aseshananda.
In addition, the roses were used as offerings at Plaintiff’s shrines. The court is persuaded that the
primary use of the rose beds was for Plaintiff’s religious purposes; therefore, the rose beds meet
the first part of the German Apost. Christ. Church test.
The remaining parts of the subject property were not used exclusively for religious
purposes. Instead, they were used exclusively or partially for residential purposes by the
caretakers. The master bedroom and office were used exclusively by the caretakers. The
remaining parts of the subject property -- the kitchen, bathrooms, other basement areas, and
garage -- were used by both the caretakers and Plaintiff’s guests. Plaintiff bears the burden of
proving by a preponderance of the evidence that those parts of the subject property were used
FINAL DECISION TC-MD 140420N 9 primarily for religious purposes rather than for personal purposes by the caretakers. Plaintiff did
not meet its burden of proof with respect to those parts of the subject property. Moreover, those
parts of the subject property were used as a residence by the caretakers and must, therefore, meet
the additional two-part test for residences under Washington Co. Assessor II, 18 OTR at 418-19.
That test is discussed in Section C below.
B. Whether Religious Use of Subject Property was Reasonably Necessary to Further
Plaintiff’s Religious Aims
The second part of the German Apost. Christ. Church test is that the religious use of
property be “reasonably necessary for the furthering of the religious aims of the church.”
German Apost. Christ. Church, 279 Or at 642. For the second part of the test, the Regular
Division of this court observed that in cases not involving residences, “so long as the use of the
property related primarily to church business, the property was held exempt.” Washington Co.
Assessor II, 18 OTR at 418.
The parts of the subject property that passed the first part of the test also pass the second
part of the test. The shrine room is reasonably necessary to further Plaintiff’s religious aims
because the shrine room facilitates religious activities, including holy company and meditation,
which are central to Plaintiff’s religion. The guest bedrooms are reasonably necessary to further
Plaintiff’s religious aims because they enable devotees visiting the retreat to be fully immersed in
the “spiritual vibrations.” The rose beds are reasonably necessary to further Plaintiff’s religious
aims because the offerings of roses are significant to worship at Plaintiff’s shrines.
C. Parts of the Subject Property Used as a Residence
The remaining parts of the subject property were used partially or exclusively for
residential purposes by the caretakers. The first requirement of the residence sub-test is that “the
FINAL DECISION TC-MD 140420N 10 official living in the residence must be required to live there by either church doctrine or
practical necessity.” Washington Co. Assessor II, 18 OTR at 419 (citations omitted). Swami
testified that the religion does not require such a residence and Hohner testified that Plaintiff has
no written contract with Pollock and Poston requiring them to reside at the subject property.
Thus, Plaintiff presented no evidence of church doctrine requiring residence at the subject
property.
In regard to practical necessity, Swami testified that caretakers are needed to deter theft
and vandalism. However, the Parsonage and Caretaker Residence Exemption Guidelines state
that “[l]iving close to the church to deter vandalism[]” does “not qualify the residence for an
exemption[.]” OAR 150-307.140(4)(2)(a). Plaintiff has overnight guests at the property an
average of one time per month. Although it may be helpful that the caretakers reside at the
subject property when guests are there, it is not a practical necessity for the caretakers to reside at
the subject property. Therefore, the parts of the subject property not primarily used for religious
purposes fail to meet the first requirement of the residence sub-test.
Because Plaintiff must satisfy both prongs of the residence sub-test, Plaintiff’s failure to
meet the first requirement of the test necessarily excludes it from qualifying for property tax
exemption. As a result, the court need not address the second requirement.
D. Partial Exemption
There are cases where a residence failed the two-part test, but a portion of the residence
was still found to be exempt. See Washington Co. Assessor II, 18 OTR at 419 (“county concedes
that the office located within the residence is exempt under ORS 307.140 because it was
reasonably necessary and primarily used to advance church purposes”); Washington County v.
Dept. of Rev., 11 OTR 251, 252 (1989) (pastor’s study was used continuously for church
FINAL DECISION TC-MD 140420N 11 purposes and was exempt from taxation); German Apost. Christ. Church, 279 Or at 644 (“the
Tax Court was correct in allowing an exemption for the office room in the Administrating
Elder’s residence but disallowing further exemption”). Those cases are in accordance with the
conclusion reached here that the subject property’s shrine room, guest bedrooms, and rose beds
are exempt from taxation. Those parts of the subject property were primarily used for the benefit
of Plaintiff and were reasonably necessary to advance Plaintiff’s religious purposes. The
remaining parts of the subject property were used either exclusively or primarily for residential
purposes and only incidentally benefited Plaintiff. They were not reasonably necessary to
advance Plaintiff’s religious purposes.
III. CONCLUSION
After careful consideration, the court concludes that the following parts of the subject
property are entitled to property tax exemption under ORS 307.140 for the 2014-15 tax year: the
shrine room, the two guest rooms, and the rose beds. The remaining parts of the subject property
are subject to taxation. Now, therefore,
FINAL DECISION TC-MD 140420N 12 IT IS THE DECISION OF THIS COURT that Plaintiff’s appeal of Defendant’s denial of
property tax exemption for property identified as Account R300249 for the 2014-15 tax year is
granted in part. The shrine room, the two guest bedrooms, and the rose beds are entitled to
property tax exemption. The remaining parts of the subject property are not entitled to
exemption.
Dated this day of June 2015.
ALLISON R. BOOMER MAGISTRATE
If you want to appeal this Final Decision, 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 or this Final Decision cannot be changed. TCR-MD 19 B.
This document was filed and entered on June 12, 2015.
FINAL DECISION TC-MD 140420N 13