Real Estate & Development Law Group Alert: New State of Oregon Development Excise Tax
Your next project may be subject to a new construction excise tax. Under recently enacted legislation, school districts now may tax construction projects that result in new structures or additional square footage in existing structures. Before imposing the tax, a school board must meet certain requirements and adopt a resolution. Several school districts recently implemented the new tax, and others likely will follow.
In school districts that adopt excise tax resolutions, nearly all private construction projects will be subject to the tax, except private schools, hospitals, affordable residential housing, religious facilities, and agricultural buildings. Public projects are exempt from the tax.
The tax may not exceed $25,000 for each building permit or structure, whichever is less.
The tax must be paid at the time a building permit is issued. It is not clear, however, whether the owner, developer, or contractor must pay the tax.
To avoid potential disputes, owners and developers should determine whether the tax affects their projects and, if it does, budget accordingly. They also may want to raise this issue with their contractors to avoid misunderstandings about who will pay the tax.
For more information about the issues in this update, please contact:
Stoel Rives' Real Estate & Development Law Group comprises lawyers specializing in real estate, land use, condominiums and planned communities and construction law. For a list of attorneys in the Real Estate & Development Law Group, click here.