NAO logo v3

Rule Review Threatens Oregon Nonprofits

Your advocacy is badly needed!

Dear Colleagues,

The Nonprofit Association of Oregon (NAO) is alerting you to an issue that we believe will cause substantial economic harm to a number of different types of Oregon nonprofits. The Oregon Department of Revenue (DOR) will be holding an Administrative Rule Review at 10:00 am on Nov 17th at their office in Salem (955 Center St. NE Salem 97301). The stated purpose of the administrative review is that: "The (current) statute (ORS 307.145) that creates a property tax exemption for schools and academies does not define what a school or academy is. This rule is being proposed to provide guidance to taxpayers and county assessor staff regarding what constitutes a "school" or "academy" that qualifies for property tax exemption under the statute."

The proposed 'clarify' language will further restrict property tax abatement for educational nonprofits that are not providing K-12 or post-secondary education by disqualifying schools that tailor their educational programs to a single discipline, art, or technical skill. It also appears that this new rule may disqualify any nonprofit teaching dancing, drama, music, religious, or athletic instruction. You can find a link to the language proposed by DOR here.

NAO believes that the proposed language in the rule review is an attempt to refine language in the existing statue so that county tax assessors can more easily assess property taxes against these types of educational organizations.

NAO knows that Oregon charitable organizations make meaningful differences in the lives of Oregonians every day. This is just as true of educational organizations as any others and, within that category, just as true of those who specialize in training in vocational skills, culture, drama, physical education, religion or the arts. Federal and state legislatures have historically recognized these many contributions by conferring tax exempt status on these organizations. We believe the language proposed by DOR will take away critical property tax exemptions that nonprofits rely on to support our communities. DOR is attempting to do this by administrative fiat and will cause many subject organizations and their beneficiaries substantial hardship. No case has been made for depriving these organization from the tax status they have come to expect from a fair reading of existing law. There is no reason to encourage local assessors to go on a hunting expedition to see how much revenue can be raised and to jumpstart an experiment to determine how many of these schools and academies will have to close their doors. The proposed rule is ill-advised and NAO opposes its adoption.

We are raising a call to action of Oregon nonprofits to oppose this rule change by DOR. Please submit your testimony before Monday morning to: [email protected] or fax to 503-945-8290. Below is a suggested template letter that you may use to express your concerns.


To Whom it May Concern,

We understand that the current definition of "schools" and "academies" contained in statute ORS 307.100. is under consideration for change by the Department of Revenue through an Administrative Rule Review on November 17th.

Our understanding of the proposed rule will restrict property tax abatement for educational nonprofits that are not providing K-12 or post-secondary education by disqualifying schools that tailor their educational programs to a single discipline, art, or technical skill. It also appears that this new rule may disqualify any nonprofit teaching dancing, drama, music, religious, or athletic instruction.

By narrowing the definition of what constitutes a school or academy you are putting our organization [insert the name of your nonprofit] at risk. We rely on this critical tax-exemption for our organization to deliver our mission to [insert your nonprofit mission] for the people we serve. Our organization will be adversely affected by this change in definition and the additional tax burden will have a negative impact on our organization's ability to provide [insert the services you provide] services to our constituency. [if you know the amount of tax burden you may now be liable for, mention that in the sentence]

Please consider the effects this administrative change would have on Oregon's [insert your constituents here] before taking further action to limit this important tax exemption.

Please add [your organization's name] name to those organizations that are adamantly opposed to this change to the definition of schools and academies in Oregon.

Sincerely,

[insert name here]

The mission of the Nonprofit Association of Oregon is to strengthen the collective voice, leadership, and capacity of nonprofits to enrich the lives of all Oregonians.

To be a strong and effective voice for the nonprofit sector, we need your voice as a member!