Habitat for Humanity v. Dept. of Rev.

Under ORS 307.130(2)(a), whether property is “actually and exclusively occupied or used” in the taxpayer’s charitable work depends on the nature of the taxpayer’s work and the relationship between the work and the property.

Habitat for Humanity of the Mid-Willamette Valley (Habitat) appealed a ruling from the Regular Division of the Tax Court. Habitat purchased a vacant lot, intending to build a home on the lot to sell to a family at below market price, consistent with one of its stated purposes in its articles of incorporation. Habitat applied for an exemption from 2013-2014 property taxes under ORS 307.130(2)(a), which provides, in relevant part, that property owned by a charitable organization shall be exempt from taxation, as long as the property is actually and exclusively used in the charitable work carried on by such institutions. The county denied Habitat’s applications because the vacant lot was not being used to provide a home to the needy. Habitat appealed to the Magistrate Division of the Tax Court and the Regular Division of the Tax Court, which granted summary judgment in favor of the Department, relying on Emanuel Lutheran Charity Bd. v. Dept of Rev., 263 Or 287 (1972) to find that under ORS 307.130(2)(a), Habitat did not qualify for the tax exemption because it was merely holding the property instead of using it. Habitat appealed. The Court held that the Tax Court erred in granting summary judgment to the Department because whether property is “actually and exclusively occupied or used in the . . . charitable . . . work carried on” under ORS 307.130(2)(a) depends on the nature of the taxpayer’s work and the relationship between the work and the property. Because Habitat’s charitable work was the acquisition and development of land, it was entitled to receive the tax exemption the county denied. Reversed and remanded.