February 1, 2000
Updated and reviewed materials April 18, 2005

 

I hope that the materials I’ve gathered together will help your EAA chapter qualify for property tax exempt status.  EAA Chapter 292 is located in Independence, Oregon.  We built a meeting room/building area 75’ x 42’ with two 42’ x 42’ hangars tacked on each end.  The property is assessed at $123,000. 

 

Two years ago we couldn’t imagine how we could ever build such a facility.  Now we can’t imagine how we could live without it.  As the Chapter Secretary, my first task in the building project was to get donations to the building fund to qualify as charitable contributions.  This process went on for three years and took several hundred hours of my time.  The next chapter should not have to duplicate this effort.  Now that the road is built other chapters should be free to drive on it.  Simply find the English Major or member of the high school debate team in your chapter and give him (or her) the challenge to make this happen. 

 

None of the process is all that difficult, and we completed it all without the benefit—or charges—of an attorney.  For Oregon EAA chapters, I recommend the Oregon Nonprofit Corporation Handbook, by Cumfer and Sohl. 

 

First, a disclaimer is in order.  I am not an attorney.  Any recommendations that I may make here are only from the point of view of someone that has filled out forms and then argued a case before the Magistrate Court.  At that level a person or a group is still able to represent himself or herself.  I focus more on the materials on the property tax angle, since that could cost our chapter $1,058 each year and eat up the dues of 22 members at our current high rate of $48/year.  Also, the federal authorities were more helpful than the county was, and it is my experience with the property tax system that might be the most beneficial.

 

Contrary to popular opinion, the government works.  I was respectful to the authorities that I came into contact with and assumed they were there to help me.  They never failed me.  I avoided being confrontational because if I were I would have an enemy on the other end of the phone.  Initially “the government” said “NO!”  But it almost always pointed the way to allow them to say “YES!”  Respect and Reason were our two strongest tools.

 

I think it would be very helpful to complete the application for 501(c)(3) in anticipation of jumping through the property tax hoops.   We thought that the property tax exemption was going to be automatic once the feds granted 501(c)(3) status, but that’s not how it works!  In all fairness, the federal authorities were very helpful.  They told us where our application was lacking and what we needed to do to qualify as 501(c)(3).  These letters are included.

 

The Magistrate Court’s determination on our tax case was made on December 1, 1999, and is part of the record.  Judge Sideras was a very sympathetic audience; he asked intelligent questions and appreciated our candor and preparation.  We were honest and forthright.  Our goals and objectives are identical to those promulgated by the national EAA.  Our arguments showed how this was compatible with the appropriate category under Oregon law.

 

We did attempt to consult with attorneys in this matter—particularly Rion Bourgeois from EAA Chapter 105, and Mike van Hoomissen with OPA, who does some aircraft insurance work.  They both advised that we simply had to make our case to the court for aviation to be treated as a scientific enterprise and therefore qualify under the Oregon statutes.  Obviously, we did indeed succeed in that task. 

 

Others now will be able to use our case as precedent.  The Polk County Assessor wasn’t about to grant us an exemption without precedent.  Counties are fighting for every nickel they can get their hands on right now, and county assessors need some kind of political cover to grant the exemption.  We are the first EAA chapter in Oregon to receive an exemption.  Our ruling with the Magistrate Court gives the other county assessors the cover they need to grant the exemption to your chapter.

 

Please feel free to call if I can help clarify something.  My number is (503) 606-9767 and my e-mail address is pongracz@ashcreekwireless.com .

 

Best Regards,

 

Mike Pongracz

649 Airport Way

Independence, OR 97351