Bain v. Department of Revenue
Jurisdiction | Oregon |
Parties | William BAIN, Director of Assessment and Taxation for Lane County, Oregon, Plaintiff-Respondent, v. DEPARTMENT OF REVENUE, Defendant, Oregon Aqua-Foods, Inc., Intervenor-Appellant. ; SC 27849. |
Citation | 293 Or. 163,646 P.2d 12 |
Docket Number | No. 1393,1393 |
Court | Oregon Supreme Court |
Decision Date | 02 June 1982 |
John C. Caldwell, Oregon City, argued the cause for intervenor-appellant. With him on the briefs was Hibbard, Caldwell, Bowerman, Schultz & Hergert, Oregon City.
Dana A. Anderson, Asst. County Counsel, Lane County Office of Legal Counsel, Eugene, argued the cause and filed the brief for plaintiff-respondent.
The Director of Assessment and Taxation for Lane County assessed an ad valorem property tax against a $4.7 million salmon hatchery operated by Oregon Aqua-Foods, Inc. (Aqua-Foods) for the tax year 1978-79. The Oregon Department of Revenue ordered the cancellation of the tax on the ground that the hatchery is a "manufacturing" facility for the purpose of the tax exemption provided in ORS 307.330 and ORS 307.340. The Oregon Tax Court determined that Aqua-Foods is not entitled to the exemption. The sole issue is whether the activity engaged in by Aqua-Foods is "manufacturing" entitling it to the tax exemption on certain improvements located on its land and used in its business.
The Tax Court adopted the statement of facts provided by the parties in their briefs to that court, and we do likewise.
ORS 307.330 provides:
ORS 307.340 provides:
The parties agree that the property met the requirements of ORS 307.330(1)(a), (b), (c) and (d). Because the Aqua-Foods hatchery was used and occupied less than a year from the time its construction began, the hatchery qualifies for a tax exemption only if the production of fish conducted there cannot be construed to be "nonmanufacturing." ORS 307.330(1)(e) excludes from the exemption a nonmanufacturing facility used or occupied less than a year from the time its construction commenced. As the tax court noted, "(i)f the subject property is a 'nonmanufacturing' facility, no tax exemption can be granted." 9 OTR at 35. 1
The order issued by the Department of Revenue was based primarily on cases from other jurisdictions, e.g., a fish hatchery held to be manufacturing, Miller v. Peck, 158 Ohio St. 17, 106 N.E.2d 776 (1952); making of beer held to be manufacturing because it required the application of labor, skill, or sophisticated machinery, Anheuser-Busch Assn. v. U. S., 207 U.S. 556, 28 S.Ct. 204, 52 L.Ed. 336 (1908); and a chicken hatchery held to be a manufacturing enterprise, Master Hatcheries, Inc. v. Coble, 286 N.C. 518, 212 S.E.2d 150 (1975). The one Oregon case relied upon by the Department was cited for the proposition that "manufacturing" occurs with the fermentation from grape juice to wine, State v. Marastoni, 85 Or. 37, 165 P. 1177 (1917). Marastoni was a case in which the defendant was prosecuted for violating a statute prohibiting the manufacture of intoxicating wine.
The Department's order recites:
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