DirectTV Oregon Properties Protected by Assessment Cap

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By Paul Shukovsky

Sept. 29 — The Oregon Department of Revenue may not disqualify DirecTV property that it started to centrally assess in tax year 2009-10 from the protection of a constitutional growth cap, the Oregon Tax Court ruled ( DirecTV, Inc. v. Or. Dep’t of Revenue, Or. T.C., No. TC 4939, 9/28/16 ).

A battle has been underway since 2009 between the department and communication companies deemed to be eligible to have their property—including intangibles—centrally assessed by the department versus counties, which don't assess intangibles. While the tax court decision doesn't alter the central assessment already affirmed by the Oregon Supreme Court, it has the potential of substantially limiting the size of the tax bite ( 2014 Weekly State Tax Report 26, 10/10/14 ).

The case is on remand from the state supreme court, which held in July that property owned and used by DirecTV to provide satellite-based entertainment is subject to central assessment. The justices, while upholding central assessment, asked the tax court to answer the question of the applicability of the growth cap.

The department asserted that subjecting the company’s properties to central assessment for the first time in tax year 2009-10 created a new-property exception to the 3-percent growth cap in Article XI, section 11 of the Oregon Constitution. The department’s maximum assessed value on the company’s property for that year represents an increase of about 150 percent from the previous tax year, Judge Henry C. Breithaupt wrote in his Sept. 28 order.

Still Up in Air

Breithaupt framed his analysis as whether the department properly construed and applied the “new property” exception to the growth cap, called Measure 50 after the 1997 ballot measure that created the cap by amending the state constitution. The court laid out the department’s argument that unit valuation as used by the department takes into account the “use” of property for inclusion in the unit, whereas “use” is not included in valuation methodology by local assessors.

“The department seeks to use this difference in valuation methodology to invoke an exception to Measure 50,” Breithaupt wrote. In rejecting the department’s position he said: “Methods of valuation pertain to RMV (real market value) of property — not the determination of whether an exception to Measure 50 exists.”

Although Breithaupt held that “the department cannot rely on the new property exception as to property previously subject to, but not subjected to, central assessment,” he said the court could not determine a specific maximum assessed value for DirecTV’s property until the parties produce additional evidence.

To contact the reporter on this story: Paul Shukovsky in Seattle at

To contact the editor responsible for this story: Ryan Tuck at

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