4 Or. Tax 482 | Or. T.C. | 1971
Decision for defendant rendered July 20, 1971.
Appeal pending. The plaintiff, an Illinois corporation authorized to do business in Oregon, operates a nursery located at the edge of the City of Salem, Oregon, specializing in the production of azalea plants to be sold at wholesale. The plants are grown entirely in movable containers and wholly within the various greenhouses located on the property. The containers in which the plants are *483 grown vary in size; as the plants develop, they are transplanted to larger vessels so that by the time they are ready for sale, each plant has its own individual container, containing 75 percent peat moss and 25 percent fir bark. At no time are the plants in the ground, and they are always separated from the ground by the container. During much of the period of cultivation, they may be set on tables of convenient height for efficient work.
On April 29, 1969, the Marion County Assessor notified the plaintiff that all plants which were potted, flatted or balled were "merchandise inventory in your business and will have to be reported as such." On May 27, 1969, the assessor notified the plaintiff that he intended to place on the 1969-70 tax roll a personal property tax inventory in the amount of $10,000, representing the true cash value of the plants as of January 1, 1969 (pursuant to the requirements of ORS
The question posed to the court is whether or not the azalea plants above described, grown entirely in movable containers, are exempt from real and personal property taxes pursuant to ORS
"The value of any deciduous trees, shrubs, plants or crops, whether annual or perennial, growing upon agricultural land devoted to agricultural purposes, shall be exempt from assessment and taxation and shall not be deemed real property under the provisions of ORS
307.010 ."
Even before the advent of "containerization," some cases have held that nursery trees have all the characteristics of a stock in trade and are therefore personalty. Story v. Christin,
ORS
ORS
The modern method of containerized growing of plants, now utilized by leading nurseries, had its genesis at about the time ORS
If ORS
"(3) 'Tangible personal property' means and includes all chattels and movables, such as boats and vessels, merchandise and stock in trade, furniture and personal effects, goods, livestock, vehicles, farming implements, movable machinery, movable tools and movable equipment."
A similar situation is found in the case of Julius Roehrs Co.v. Div. of Tax Appeals,
1. This court adopts the reasoning of the above-quoted case. (Although this denies the plaintiff the exemption from property taxes found in ORS
In passing, it is interesting to note that after this case had been filed in the Oregon Tax Court and before it was argued, House Bill 1325 was placed before the 1971 regular session of the Oregon Legislative Assembly. As originally introduced, it amended ORS
"Section 1. ORS
"307.320. The value of any deciduous trees, shrubs, plants or crops, whether annual or perennial, growing upon agricultural land devoted to agricultural purposes, including but not limited to nursery stock as defined by subsection (5) of ORS
571.005 , whether growing in containers or not, in, on or above the agricultural land, shall be exempt from *488 assessment and taxation and shall not be deemed real property under the provisions of ORS307.010 .Section 2. The amendment of ORS
307.320 by section 1 of this 1971 Act does not constitute a change in, but is declaratory of, existing law."
On April 20, 1971, in the House Committee on Revenue, all of the foregoing was deleted and the following material substituted:
"Section 1. Section 2 of this Act is added to and made a part of ORS chapter 307.
"Section 2. Nursery stock, as defined in subsection (5) of ORS
571.005 , whether bare root, or whether balled or heeled or growing in containers in or upon the ground, is exempt from ad valorem taxation in the hands of the grower or wholesalers, but not where held for sale at retail."
This amended version was approved as Or L 1971, ch 285, effective September 9, 1971.
No question was before the court as to the value ascribed to the plaintiff's personal property by the assessor. For the assessment date January 1, 1969, the true cash value of $10,000 set by the assessor's letter of May 27, 1969, (Plaintiff's Exhibit 2) is affirmed. *489