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Keywords

statutecorporationnonprofit

plaintiffcorporationnonprofit

Related Cases

Friendsview Manor v. State Tax Commission, 247 Or. 94, 420 P.2d 77

Facts

Friendsview Manor was established as a nonprofit corporation by the Oregon Yearly Meeting of Friends Church in 1956, primarily funded through founder's fees paid by residents. The fees, which could be as high as $8,500, were partially refundable based on residency duration. The Manor provided living accommodations, board, and health care for its residents, who paid monthly fees. Despite some financial losses in its early years, the Manor continued to operate, with a significant portion of its residents being able to pay for their own care, leading to the dispute over its tax-exempt status.

The Manor is the product of the inspiration of the Oregon Yearly Meeting of Friends Church (Quakers). In 1956 the plaintiff was organized as a nonprofit corporation; there are no members. Later, the Board of Directors hired a Quaker pastor at $480 per month as executive director.

Issue

Whether Friendsview Manor qualifies as a charitable institution and is therefore exempt from real property taxation under ORS 307.130.

The issue is whether Friendsview Manor, a retirement home, is a charitable institution and, therefore, exempt from real property taxation.

Rule

ORS 307.130 states that property owned by charitable institutions is exempt from taxation if it is actually and exclusively occupied or used in charitable work.

ORS 307.130 provides: ‘* * * the following property owned or being purchased by incorporated literary, benevolent, charitable and scientific institutions shall be exempt from taxation: ‘(1) Except as provided in ORS 740.080, only such real or personal property, or proportion thereof, as is actually and exclusively occupied or used in the literary, benevolent, charitable or scientific work carried on by such institutions.’

Analysis

The court analyzed the financial structure of Friendsview Manor, noting that while it provided some assistance to residents unable to pay, the majority of its residents were financially self-sufficient. The court emphasized that the exemption statute requires exclusive use for charitable purposes, which Friendsview Manor did not meet since it primarily served paying residents. The court distinguished this case from previous rulings on charitable exemptions, asserting that the Manor's funding model did not align with the altruistic intent required for such exemptions.

We conclude that the basic deficiency in the Manor's reasoning is that it would grant a charitable tax exemption to housing for aging persons paid for by these same aging persons.

Conclusion

The court affirmed the decision of the State Tax Commission, concluding that Friendsview Manor did not qualify for a charitable exemption from real property taxes.

Affirmed.

Who won?

State Tax Commission; the court found that Friendsview Manor did not meet the criteria for a charitable institution due to its financial model primarily serving self-sufficient residents.

The State Tax Commission found that it was not and the Tax Court affirmed such decision.

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