Opinion ID: 2603509
Heading Depth: 2
Heading Rank: 2

Heading: Commercial Use of the Properties.

Text: The Department contends that the Foundation's properties are tainted with impermissible commercial use. The Department points to the fact that the Foundation sells books and tapes and charges tuition to those who stay at the ranch. There is evidence from both parties that part of the Evelyn Street property is used for the sale of books and tapes. This use would not be exempt by the terms of ORS 307.140, which prohibits exemption for any part of any house of public worship or other additional buildings or property which is kept or used as a store or shop   . The Department, however, does not claim that sale of merchandise is the primary use of any of the properties. The statute itself recognizes that some part of exempt property may be used for a nonexempt purpose and apportions the exemption accordingly. Charging fees does not automatically transform a charitable exempt organization into a nonexempt one. In Benton Co. v. Allen, supra, 170 Or. at 486-87, 133 P.2d 991, this court stated: It is well settled that the fact that fees are charged those patients who are able to pay does not derogate from the charitable character of the institution, provided the income so derived is used to maintain the institution or extend its facilities devoted to charity, or for other charitable purposes. Similarly, the concern in Corporation of Sisters of Mercy v. Lane County, 123 Or. 144, 154, 261 P. 694 (1927), was not with the fact that patients were charged a fee for hospital services, but rather with whether the fees were devoted solely to maintaining the charitable institution. Roy Masters testified that the tuition was used to help defray operating expenses. He stated that there is little excess revenue from tuition at the ranch. The Department did not contradict this evidence. We find little in the record to support the Department's claim that these properties, with the exception of sales activities, were used to make a profit. Having found that the Foundation is a nonprofit organization not primarily engaged in commercial endeavors, we consider the primary uses of each of the three subject properties.