Opinion ID: 1730468
Heading Depth: 1
Heading Rank: 3

Heading: Meaning of Primary Occupation and Source of Income

Text: For some of the same reasons stated above with respect to the meaning of income, we agree with Petitioner Gragg that the word primary should not be interpreted as requiring the farmer or rancher to receive more than 50% of his total gross income from his farming or ranching business. The word primary has a plain and simple meaning of chief, first, or foremost in degree, quality, or importance or in a list, series or sequence. It is not a synonym for majority. Available dictionaries seem to agree substantially with Webster's Third New International Dictionary (1967) which defines primary as first in rank or importance; chief, principal, or the additional meaning given in the American College Dictionary (1957), first in order in any series, sequence, etc. A similar definition was employed in San Marcos, supra, wherein the following instruction of the trial court was approved: You are instructed that the term primary, as used in this charge, means principal; chief; and greater portion of. It has been specifically held that primarily engaged in manufacturing does not mean that a corporation must receive from manufacturing over fifty percent of its income in order to qualify for a statutory offset against corporate excise taxes granted to any corporation which is primarily engaged in manufacturing, processing or assembling materials into finished products. . .. Industrial Refrigeration Equipment Co. v. State Tax Commission, 242 Or. 217, 408 P.2d 937 (1965). In that case manufacturing and assembling constituted 46% of the corporation's four sources of income in 1959 and 30% in 1962. These percentages were not exceeded by revenues from any of the three other categories of activities (rentals, sales, or services). In holding the corporation eligible, the court said: We believe that primarily means chiefly or principally but that it does not necessarily mean over 50 per cent. The Commission contends that in determining the ratio of activities only two factors should be consideredmanufacturing and nonmanufacturingand that Plaintiff is not entitled to the offset as it was not primarily engaged in nonmanufacturing activities. We cannot accept this premise. If the legislature so intended, it could have used the words over 50 per cent or similar words describing more than half. It did not. Primary can be given its usual meaning without requiring that it be more than 50 per cent. . . . . . We hold that primarily as used in ORS 317.070(2) means the largest category of several categories, but not necessarily more than 50 per cent of the total volume of business. We hold that a landowner seeking the agricultural use designation and assessment can qualify by discharging his burden of timely showing in a proper administrative or judicial proceeding that his land is designated for agricultural use under the terms of Sec. 1-d of Article 8, including a showing that such use is a business which is his primary occupation and source of income, without showing that his agricultural business occupies more than 50% of his time or accounts for more than 50% of his total gross income for the relevant years. It is sufficient if the landowner shows that he devotes a greater amount of time to his agricultural business than to any other occupations or businesses and that he receives more gross income from his agricultural business than from any other occupation or business. As hereafter shown, Petitioner Gragg failed to carry his burden of proof timely or satisfactorily with reference to his gross income from agriculture as compared to other business ventures. It has been suggested that this interpretation might lead toward the fractionalization of other businesses conducted by a farmer-landowner in order to make his gross receipts from agricultural uses larger than any one of several of his other businesses. Tax assessors are given sufficient authority under the amendment to ferret out and ignore any such artificial arrangements designed to qualify for the special agricultural tax assessment. If a landowner-agriculturalist with a greater gross income from the oil business or any other occupation intentionally divides his business into multiple corporations or partnerships for the purpose of making his agricultural income greater than the gross income of any one of the multiple separate but related business entities, the tax assessors have the authority to deny the application and prevent wrongful use of the agricultural assessment amendment.