Hazelden Foundation v. Yamhill County Assessor , 21 Or. Tax 245 ( 2013 )

No. 32 August 30, 2013 245
IN THE OREGON TAX COURT
REGULAR DIVISION
HAZELDEN FOUNDATION,
Plaintiff,
v.
YAMHILL COUNTY ASSESSOR
and Department of Revenue,
Defendants.
(TC 5030)
Plaintiff (taxpayer) appealed from a decision of Defendant Yamhill County
Assessor (the county) as to the tax exemption status of its property in Yamhill
County. Taxpayer argued that its property was exempt due to the fact it was used
in taxpayer’s activities, which it considered to be charitable under ORS 307.130.
The county asserted that taxpayer did not meet the criteria of a charitable insti-
tution under the requirements of the statute, specifically because taxpayer’s work
did not incorporate the required component of “gift or giving” recognized in the
case law of Oregon courts concerning exemption for property owned by charitable
institutions. Following trial the court found that while taxpayer’s activities met
some of the factors of a qualifying charitable institution, other crucial factors,
particularly taxpayer’s tiered payment structure and taxpayer’s decision to not
accept payment from government insurance programs, meant that taxpayer’s
doors could not be considered open to rich and poor alike, therefore taxpayer
could not be considered a charitable institution pursuant to the requirements of
ORS 307.130.
Trial was held June 25, 2012, in the courtroom of the
Oregon Tax Court, Salem.
Dan Eller, Schwabe Williamson & Wyatt PC, Portland,
argued the cause for Plaintiff (taxpayer).
Darren Weirnick, Assistant Attorney General, Depart-
ment of Justice, Salem, and Christian F. Boenisch, Yamhill
County Counsel, McMinnville, argued the cause for Defen-
dants Department of Revenue (the department) and Yamhill
County Assessor (the county).
Decision for Defendants rendered August 30, 2013.
HENRY C. BREITHAUPT, Judge.
I. INTRODUCTION
This case comes before the court for decision fol-
lowing a trial in the Regular Division. Plaintiff (taxpayer)
246 Hazelden Foundation v. Yamhill County Assessor
contends that certain real property and certain personal
property owned by taxpayer and located in Yamhill County
was exempt under ORS 307.130 during the 2010-11 tax
year.1 Taxpayer argues that it was, and is, a charitable insti-
tution and the property in question was actually and exclu-
sively used in the charitable work of taxpayer. Defendants
Yamhill County Assessor and the Department of Revenue
(collectively referred to in this opinion as “the county”) con-
cede that taxpayer met some of the characteristics of a char-
itable institution, but that its activities lacked the required
element of “gift or giving” found in Oregon case law concern-
ing ORS 307.130. The county also contends that taxpayer
has failed to carry the burden of proving by a preponderance
of the evidence that some of the real property at issue in
this case was actually and exclusively used in the charitable
work of taxpayer during the tax year at issue. The tax year
at issue is 2010-11.
This opinion should be read in context with this
court’s decision in Serenity Lane, Inc. v. Lane County
Assessor, 21 OTR 229 (2013).
II. FACTS
Taxpayer is an IRC section 501(c)(3) nonprofit cor-
poration organized under the laws of the state of Minnesota.2
For many years a wholly-owned subsidiary of taxpayer oper-
ated an addiction treatment facility in the city of Newberg in
Yamhill County. In 2010, taxpayer merged with its subsidi-
ary and assumed direct ownership of the treatment facility.
Taxpayer’s bylaws state that it is organized to
provide “high quality, affordable rehabilitation, education,
prevention and professional services and publications in
chemical dependency and related disorders.” Taxpayer oper-
ates the facility as part of that mission. Taxpayer is known
for serving individuals who are employed as professionals,
such as doctors and lawyers. During the 2010-11 tax year,
about 50 percent of taxpayer’s patients were profession-
als; the remaining 50 percent came from non-professional
backgrounds.
1
All references to the Oregon Revised Statutes (ORS) are to the 2009 edition.
2
All references to the Internal Revenue Code (IRC) are to the 2008 edition.
Cite as 21 OTR 245 (2013) 247
Taxpayer’s primary focus is on inpatient residential
treatment of individuals recovering from substance addic-
tion. Taxpayer also has a publishing subsidiary and a grad-
uate school that offers a master’s degree in addiction coun-
seling, though it is not clear from the record to what extent
the operations of those entities interacted with the opera-
tions of taxpayer’s treatment facility during the tax year at
issue.
Taxpayer maintains in its briefing that it charges
the market rate for the treatment that it provides. The
record indicates that this can be a very substantial sum:
stipulated exhibits suggest that $27,000 is representative of
what taxpayer would charge an average patient for 28-day
residential treatment. Taxpayer has a “patient aid” program
in place to assist patients who do not have the resources to
pay the full price of treatment. Taxpayer’s patient aid pro-
gram has two primary components. First, taxpayer provides
need-based discounts on the price of treatment to help cali-
brate the amount taxpayer charges any given patient to the
financial resources available to the patient. This calibration
works on the basis of 10 “tiers,” with each tier representing
an additional 10 percent discount on the nominal price of
treatment. The tiers correspond with a scale of point scores
on a worksheet that is used by taxpayer’s employees to eval-
uate the financial resources available to a given individual.
This worksheet includes factors such as household income,
number of dependents, net worth, and debt-to-income ratio.
In each category, more points are allocated to those whose
circumstances suggest a greater need for assistance. The
higher an individual’s overall score, the greater the discount
on treatment offered to that individual. In its response to
a request for admissions from the county, taxpayer stated
that it normally caps the discount offered at 60 percent off
its normal rates but approves additional discounts—in some
instances up to 100 percent—on a case-by-case basis. The
record does not contain detailed information regarding the
criteria used in evaluating patients that would require a
greater than 60 percent discount to afford treatment.
In addition, during the tax years at issue taxpayer
accepted a limited number of patients that had been referred
to taxpayer by the Yamhill County Department of Health
248 Hazelden Foundation v. Yamhill County Assessor
and Human Services (Yamhill County HHS) free of charge.
Taxpayer formalized this arrangement with Yamhill County
HHS in September of 2010 by agreeing to treat one patient
from Yamhill County’s chemical dependency program per
calendar quarter (four per calendar year). In actual prac-
tice taxpayer treated one such patient in 2009, three such
patients in 2010, and five in 2011. As was mentioned above,
taxpayer accepted other patients free of charge during the
tax years at issue in addition to those referred by Yamhill
County HHS. However, the Yamhill County HHS patients
made up the large majority of the patients in either resi-
dential or extended treatment that were given free care by
taxpayer.3
During the tax years at issue taxpayer did not
admit any patients for whom federal or state government
insurance was used to pay for service in whole or in part.
On or about April 1, 2010, taxpayer submitted to
the county five separate applications for exemption from
property tax for the 2010-11 tax year. The applications
covered real property accounts 33207, 33216, 33742, and
33840, and personal property account number 480018. The
applications specified that taxpayer was seeking exemption
under ORS 307.130. There followed an exchange of letters
between taxpayer and the county as the county sought to
determine whether taxpayer’s operations were charitable.
Ultimately, the county decided that taxpayer was not a
charitable institution and denied taxpayer’s application for
exemption. Taxpayer appealed the decision of the county to
the Magistrate Division of the Oregon Tax Court. This mat-
ter was then specially designated to the Regular Division of
the court.
III. ISSUE
The issue in this case is whether the facility is
exempt from ad valorem property tax under ORS 307.130(2).
3
Documents provided by the parties appear to show that the patient referred
by Yamhill County HHS was the only patient to receive free inpatient residential
or extended treatment in 2009, that two non-HHS-referred patients received free
extended treatment in 2010, and that one non-HHS-referred patient received free
extended treatment and one received residential treatment in 2011.
Cite as 21 OTR 245 (2013) 249
IV. ANALYSIS
ORS 307.130(2) reads, in pertinent part:
“[T]he following property owned or being purchased by * * *
incorporated literary, benevolent, charitable and scientific
institutions shall be exempt from taxation:
“(a) Except as provided in ORS 748.414, 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.”
Taxpayer argues that it is an incorporated chari-
table institution, as that term is used in the statute, and
that the five property tax accounts comprising the facility
are actually and exclusively used in the charitable work
carried on by taxpayer—specifically, providing treatment to
those suffering from the disease of substance addiction. The
county does not appear to dispute that taxpayer has some
of the salient features of a charitable institution, but argues
that taxpayer’s work does not incorporate the required com-
ponent of “gift or giving” recognized in the case law of this
court and of the Supreme Court concerning exemption for
property owned by charitable institutions.
The county also argues that taxpayer has not met
the burden of proving by a preponderance of the evidence
that some of the parcels at issue in this case are exclusively
used or occupied by taxpayer.
A charitable institution, for purposes of ORS
307.130, must have the following three features:
(1) Charity as the organization’s “primary, if not sole,
object”;
(2) The organization’s operations must serve the charita-
ble mission of the organization;
(3) The presence of an element of “gift or giving” in the
activities of the organization.
SW Oregon Pub. Def. Services v. Dept. of Rev., 312 Or 82, 89,
817 P2d 1292 (1991). In its briefing the county does not dis-
pute, and in some places implicitly concedes, that taxpayer
has the first two required features. However, the county
250 Hazelden Foundation v. Yamhill County Assessor
disputes that taxpayer’s activities meet the “gift or giving”
requirement.
Taxpayer approaches the question of “gift or giving”
from two different perspectives, derived from decisions of
this court and of the Supreme Court. One of taxpayer’s per-
spectives can be styled a “quantitative” approach; the other
might be styled a “qualitative” approach. Taxpayer argues
that it satisfied the “gift or giving” requirement under both
approaches.
A. Taxpayer’s Quantitative Approach
Taxpayer derives its quantitative approach from
the Supreme Court’s opinion in YMCA v. Dept. of Rev., 308
Or 644, 784 P2d 1086 (1989) (YMCA II). In that case, the
Supreme Court found that there was a lack of “gift or giv-
ing” involved in the operations of two fitness centers owned
by the YMCA where the “scholarship giving” provided by
the YMCA—essentially a need-based discount on the cost
of YMCA memberships—amounted to “less than four per-
cent” of the YMCA’s total annual revenue. Id. at 653-654.
Taxpayer argues that it meets the “gift or giving” require-
ment because the amounts it gives in patient aid substan-
tially exceeded four percent—amounting to about seven
percent of annual revenues during the two calendar years
included in the 2010-11 tax year.
Taxpayer further points out that the YMCA II court
also justified its decision in that case on the ground that
only eight percent of the members at the relevant YMCA
facilities had benefitted from the discount policy, whereas
between 25-30 percent of taxpayer’s patients received some
reduction of charges through taxpayer’s patient aid program
during the 2010-11 tax year.
In other words, taxpayer takes the Supreme Court’s
use of the phrases “less than four percent” and “less than
eight percent” as establishing “floors.” Under taxpayer’s
quantitative approach, taxpayer would satisfy the “gift or
giving” requirement because the revenues devoted to its
patient aid program and the distribution of that aid among
taxpayer’s patients exceeded both of the “floors” taxpayer
Cite as 21 OTR 245 (2013) 251
asserts that the YMCA II court established during the tax
year at issue.
This court is of the opinion that taxpayer’s quanti-
tative approach asks the phrasing of the Supreme Court to
do more work than the context of those statements justifies.
YMCA II does not state whether four percent and eight per-
cent are floors, or deep in the basement (to extend the meta-
phor). Nothing in the Supreme Court’s decision compels this
court to rule that the “gift or giving” requirement is met
simply because taxpayer’s patient aid exceeds four percent of
annual revenues and more than eight percent of taxpayer’s
patients receive such aid.
B. Taxpayer’s Qualitative Approach
Taxpayer’s qualitative approach is more in keeping
with the cases of this court and of the Supreme Court on
the subject of exemption for charitable institutions. Under
taxpayer’s qualitative approach, taxpayer argues that it
satisfies the “gift or giving” requirement because it satis-
fies qualitative criteria for a charitable institution that have
been adopted by the Supreme Court and used by this court
in past cases:
“(1) Whether the receipts are applied to the upkeep, main-
tenance and equipment of the institution or are otherwise
employed;
“(2) Whether patients or patrons receive the same treat-
ment irrespective of their ability to pay;
“(3) Whether the doors are open to rich and poor alike
and without discrimination as to race, color or creed;
“(4) Whether charges are made to all and, if made, are
lesser charges made to the poor or are any charges made to
the indigent.”
SW Oregon Public Def. Services, 312 Or at 82, (quoting
Oregon Administrative Rule (OAR) 150-307.130-A(4)(d)(C)).
In keeping with these prior cases, not all of the factors listed
above have to be present for a given organization to meet the
“gift or giving” requirement, nor are these the only factors
that a court could rely on to determine that sufficient “gift
or giving” is present in the activities of a given organization.
252 Hazelden Foundation v. Yamhill County Assessor
Methodist Homes, Inc. v. Tax Com., 226 Or 298, 310, 360
P2d 293 (1961). However, these factors have been specifi-
cally identified as probative of the presence or absence of
“gift or giving.”
The court observes at the outset that the county
does not allege any discrimination on the basis of race, skin
color, or religious identification on the part of taxpayer. The
court therefore considers that part of the third “gift or giv-
ing” factor satisfied. However, whether taxpayer’s “doors are
open to rich and poor alike” will be established at length in
the following analysis.
With regard to the first factor, taxpayer’s Assistant
Controller testified at trial that the revenues taxpayer
derives from the facility are reinvested into the operations
of taxpayer. The county appears to argue that this is insuf-
ficient to satisfy the first “gift or giving” factor, because rev-
enues from the facility are used to “subsidize” taxpayer’s
activities in other jurisdictions, rather than simply being
reinvested in the facility itself.
The county’s argument is not well taken. The
court does not understand the first “gift or giving” factor as
requiring that receipts derived from one operation by a pur-
portedly charitable institution remain forever segregated
and used only in maintaining or expanding that one opera-
tion. Nor does the court read the first factor to require that
such receipts not be used to subsidize other activities of the
institution, at least as long as those activities contribute to
the charitable goal of the institution and are not undertaken
for private profit. The first “gift or giving” factor deals with
the revenues of a purportedly charitable institution at the
level of the institution; hence the word “institution” in the
material quoted above from the Supreme Court’s decision
in SW Oregon Public Def. Services. The point of the factor
is that revenues received by an institution organized for a
charitable purpose must be used in furtherance of the char-
itable purpose of the institution rather than, for instance,
the enrichment of the private individuals that control the
institution. Cf. Methodist Homes, Inc., 226 Or at 315-16. As
long as no such ulterior use of revenues is present, this first
factor is met regardless of whether a purportedly charitable
Cite as 21 OTR 245 (2013) 253
institution’s component parts are self-sustaining or must be
supported by excess revenues of other parts of the institu-
tion’s overall operation. The county has not alleged any such
ulterior use and so, in light of the testimony of taxpayer’s
Assistant Controller, this factor leans in taxpayer’s favor.
Taxpayer argues that it meets the second fac-
tor because it provides the same treatment to its patients
regardless of their ability to pay. Based on the testimony
at trial, the court understands that what taxpayer means
by this is that there is no differentiation in the treatment
that is given to taxpayer’s patients based on their ability to
pay once they are actually admitted to the facility. The court
agrees that equal treatment of patients irrespective of abil-
ity to pay after the decision to admit the patient has been
made is an indicator, at least at the margins, of the pres-
ence of “gift or giving.” However, equal treatment of patients
after they have been admitted is a hollow sort of charity if
the ability of a patient to pay for treatment instead simply
acts as a bar to admission in the first place.
That question appears to be part of what the third
factor is driving at when it looks to “[w]hether the doors
are open to rich and poor alike and without discrimination
as to race, color or creed.” Taxpayer argues that it meets
this requirement because it “makes the facility available
to patients regardless of race, color, or creed.” As the court
stated above, the county does not allege any such discrimi-
nation and its absence does weigh in taxpayer’s favor. That
being said, the presence of an “and” in between “open to
rich and poor alike” and “without discrimination as to race,
color or creed” shows that these are two separate items for
consideration. Taxpayer does not address the first of these
two items in its briefing, and a failure by taxpayer to show
that its doors are indeed “open to rich and poor alike” would
severely undermine the case for the presence of “gift or giv-
ing.” For the reason discussed in the paragraph preceding
this one, this would, in turn, jeopardize taxpayer’s case for
treatment as a charitable institution. It is to that question
that the court now turns.
However, in addressing the third factor the court
must first make a necessary detour to address the fourth
254 Hazelden Foundation v. Yamhill County Assessor
factor. The fourth factor addresses the fact that taxpayer’s
services, like those of many healthcare providers, do not come
cheaply. The fact that taxpayer charges for its services does
not necessarily lead the court to find a lack of “gift or giv-
ing.” OAR 150-307.130-(A)(3)(d)(C). Likewise, that taxpayer
expects patients who are capable of paying the full price for
treatment to pay the going rate for treatment is also not a
problem. Gregory v. Salem General Hospital, 175 Or 464,
469-70, 153 P2d 837 (1944). However, a high price tag alone
can amount to a de facto ban on patients who lack either suf-
ficient personal assets or sufficient insurance to pay for the
treatment if those prices are insisted upon in all cases and
if those who cannot afford to pay are denied treatment for
no other reason than their inability to pay. A similar effect
might also arise where, as here, taxpayer does not insist on
charging all of its patients full price, if the criteria used by
taxpayer to determine who is to be given discounted care,
and how much of a discount to provide, results in the sub-
stantial exclusion of the poor and indigent from treatment.
Taxpayer can, and does, remove some of the sting
that might arise from the high cost of its treatment through
its “patient aid” program. Under that program, the price
that taxpayer actually bills its patients for treatment varies
depending on criteria chosen by taxpayer that seek to deter-
mine the financial resources available to the patient. So to
that extent, taxpayer satisfies the fourth “gift or giving” fac-
tor described above.
The exact contours of taxpayer’s patient aid pro-
gram during the tax years at issue are, however, of great
importance in considering whether taxpayer’s doors were
truly open to rich and poor alike. As the court understands
it, taxpayer’s patient aid program has two main components.
First, as was mentioned above, taxpayer calibrated the
amount that it charged patients to the financial resources
available to any given patient. Second, taxpayer accepted
roughly one patient per quarter at no charge on referral
from the Yamhill County HHS.
The court finds taxpayer’s system of need-based
reductions in prices charged for treatment especially pro-
bative of this issue. The court understands that taxpayer’s
Cite as 21 OTR 245 (2013) 255
system of graduated discounts works on the basis of ten tiers.
However, the parties have provided to the court a copy of the
worksheet used by taxpayer’s employees to determine the
level of discount that any individual qualifies for. The court
notes that this worksheet only appears to account for six
tiers of discount. That is not to say that the discounts offered
by taxpayer necessarily “max out” at a 60 percent reduction
on charges for treatment, but it does appear that taxpayer’s
frontline intake staff can apparently only qualify a patient
for a 60 percent discount on what that patient would other-
wise be charged for treatment. The court understands, from
statements contained in taxpayer’s response to discovery
requests made by the county, that taxpayer granted patient
aid at tiers 7 or above in a “few” instances “when an indi-
vidual patient experiences extreme hardship.” However, the
record does not contain any indication of the criteria used
by taxpayer to determine just when such a hardship had
presented itself.
The record does, however, bear out that these
exceptions are indeed “few.” The county has placed in the
record data showing the number and type of charges made
to patients at each tier of taxpayer’s patient aid program
during the tax years at issue in this case. For each of the
years at issue in this case, the numbers of patients receiv-
ing either residential or extended care at a level of patient
aid above tier 6 are very small, relative to taxpayer’s overall
patient load for that year: 1 out of 274 patients in 2009; 6 out
of 309 patients in 2010; and 5 out of 334 patients in 2011.
Other patients received discounts at 70 percent or above, but
as the court understands the exhibits submitted by the par-
ties, these individuals were not themselves receiving treat-
ment for their own substance addiction, but were instead
participants in the family treatment component of another
patient’s treatment for substance addiction. In any event,
the amounts that taxpayer bills such patients is so small,
relative to the price of its residential and extended treat-
ment, that the fact taxpayer extended greater-than-normal
discounts in those instances is of limited significance.
In viewing these numbers, the court is cognizant
of taxpayer’s agreement with Yamhill County HHS to treat
one patient per calendar quarter free of charge on referral
256 Hazelden Foundation v. Yamhill County Assessor
from the county. This agreement helps taxpayer’s case in
that it clearly illustrates an intention by taxpayer to make
its services available, at least under the right circumstances,
to some number of individuals who needed their services but
would not be able to pay. It also helps taxpayer’s case that
taxpayer accepted patients on referral from Yamhill County
HHS before entering into a formal arrangement to do so in
September of 2010, and accepted more than were called for
in the agreement after entering into it.
However, while these patients stand in evidence of
considerable generosity on the part of taxpayer, the problem
remains that they are very few in number. Furthermore, the
distribution of taxpayer’s grants of patient aid among the
varying tiers on taxpayer’s patient aid scale during 2009,
2010, and 2011 calendar years suggests a marked tendency
on the part of taxpayer to grant relatively modest discounts
off the nominal price of treatment to larger numbers of
patients, rather than granting larger discounts to less afflu-
ent patients or reducing the list prices for its services. The
court understands, of course, that the resources taxpayer is
able to devote to patient aid are limited and that taxpayer
must make what it considers the best use of those resources.
However, the distribution pattern chosen by taxpayer sug-
gests a distinct preference on the part of taxpayer for rela-
tively affluent patients.
The court is particularly concerned with the effect
of taxpayer’s policy of capping patient aid at 60 percent of
the cost of treatment. As the court has noted above, this was
a “soft” limit subject to exceptions both for a small number of
patients referred to taxpayer by Yamhill County HHS and
to exceptions for an even smaller number of individuals that
taxpayer determined, by criteria not disclosed to this court,
to admit at levels of patient aid above 60 percent. In materi-
als submitted to the court as stipulated exhibits, taxpayer’s
staff justifies the existence of the soft 60 percent cap on
the ground that there is a therapeutic benefit to having its
patients make an investment in their recovery from addic-
tion. The court is sympathetic to this view, but in light of
taxpayer’s high charges for treatment taxpayer’s decision to
place a soft cap at 60 percent leaves the costs of taxpayer’s
services out of reach of many people legitimately needing the
Cite as 21 OTR 245 (2013) 257
types of services that taxpayer provides. To most indigent,
and indeed, to most working class individuals, 40 percent of
$28,000 is a large sum that could only be acquired, if at all,
with a great deal of difficulty and at risk of future financial
distress. Placing an across-the-board (albeit porous) cap at
60 percent patient aid suggests some measure of disregard
for the needs or circumstances of medium- and low-income
individuals.
The fact that taxpayer does not accept payment
from Medicare or Medicaid only reinforces that impression,
inasmuch as it excludes from taxpayer’s pool of potential
patients virtually all indigent patients, unless allowed in
using criteria not found in the evidence presented to the
court regarding taxpayer’s patient aid program. Taxpayer
readily accepted payment from private insurers, and nothing
in the record suggests that taxpayer required out-of-pocket
payment from patients whose insurance covered the costs
of taxpayer’s services, so taxpayer’s decision to not accept
payment from government insurance programs cannot be
ascribed to a desire to ensure that its patients had sufficient
“skin in the game” to motivate their recovery.
This is a crucial distinction between taxpayer and
other similar institutions that this court has found to be
charitable. The court sees parallels between taxpayer’s sit-
uation and that presented in Ev. Lutheran Good Samaritan
Society v. Department of Revenue, 5 OTR 14 (1972). In that
case, this court explicitly noted a hospital’s acceptance of
patients paying for treatment through government spon-
sored welfare programs for the poor as indicative of the char-
itable nature of that hospital precisely because it showed
that the hospital’s doors were open to rich and poor alike.
Id. at 22-23. As has been noted, taxpayer does not accept
payment from such welfare programs.
Taxpayer’s policy of not accepting payment from
welfare programs for the poor also distinguishes this case
from the court’s decision regarding a somewhat similarly
situated addiction treatment provider in Serenity Lane, Inc.
v. Lane County Assessor, 21 OTR 229 (2013). The amount
of money set aside for patient aid in that case was actually
less, as a percentage of the revenue of the institution at issue
258 Hazelden Foundation v. Yamhill County Assessor
in that case, than what taxpayer sets aside as a percentage
of its own revenue in this case. However, that institution
has made significant, long term investments in making its
services widely available to the working poor and indigent,
as well as to the middle class individuals that made up the
bulk of its patients. To make those services available to the
poor while also remaining financially viable, the taxpayer
in Serenity Lane accepted payment from public insurance
programs for the poor.
The taxpayer in this case does not accept payment
for treatment from government insurance programs, and has
instead put policies in place to limit the costs it incurs by treat-
ing patients who cannot afford to pay the full price of treat-
ment. These policies, as a practical matter, severely restrict
access to taxpayer’s services by the indigent, the working
poor, and most probably the lower middle class as well. In that
sense, taxpayer’s doors are not “open to rich and poor alike” in
the same way as are those of other institutions that this court
has found “charitable” for purposes of ORS 307.130.
On review of the stipulations of the parties, and of
the testimony and exhibits adduced at trial, the court does
not find that taxpayer has carried the burden of showing
that its doors are “open to rich and poor alike.” While this
need not be dispositive in every case of the presence of “gift
or giving” so as to deprive an institution of a finding that
it is charitable, the court is of the opinion that it is disposi-
tive here. Taxpayer is clearly an institution that has a noble
purpose: it seeks to counter a dreadful blight on our society,
and the evidence clearly shows it is prone to generosity in
pursuing that mission. However, taxpayer’s high prices for
treatment, combined with taxpayer’s evident priorities in
granting relief from the burden of those high prices and tax-
payer’s refusal to accept payment from government insur-
ance programs aimed at expanding medical access for the
poor, suggest that taxpayer’s services are specifically tar-
geted at the more affluent segments of our society. An insti-
tution with such priorities may be, as here, admirable; but it
is not a charity for purposes of ORS 307.130.
Having concluded that taxpayer is not a charitable
institution for purposes of ORS 307.130, the court does not
Cite as 21 OTR 245 (2013) 259
reach the question of whether taxpayer actually and exclu-
sively uses the property at issue in this case in pursuit of a
charitable mission.
V. CONCLUSION
Now, therefore,
IT IS THE DECISION OF THIS COURT that tax-
payer is not a charitable institution for the purposes of ORS
307.130, and is therefore not exempt from ad valorem prop-
erty tax under that statute.