S056384, Opinion — Northwest Natural Gas Co. v. Dept. of Rev.

536
Argued and submitted November 2, 2009, judgment of Tax Court affirmed
January 28, 2010
NORTHWEST NATURAL GAS COMPANY,
Respondent,
v.
DEPARTMENT OF REVENUE,
Appellant.
(TC 4751; SC S056384)
226P3d 28
CJS, Taxation§ 232.
En Banc
On review from the Oregon Tax Court.*
* Appeal from the Oregon Tax Court, Henry C. Breithaupt, Judge. 19 OTR
367, 2007 WL 4127669 (2007).

Cite as 347 Or 536 (2010) 	537
Marilyn J. Harbur, Senior Assistant Attorney General,
Salem, argued the cause for appellant. With her on the open-
ing brief were Hardy Myers, Attorney General, and Melisse
S. Cunningham, Assistant Attorney General. With her on the
reply brief were John R. Kroger, Attorney General, and
Melisse S. Cunningham, Assistant Attorney General.
Robert T. Manicke, Stoel Rives LLP, Portland, argued the
cause for respondent. With him on the brief were James N.
Westwood and Eric J. Kodesch.
LINDER,J.
The judgment of the Tax Court is affirmed.

538 	Northwest Natural Gas Co. v. 	of Rev.
LINDER,J.
The issue in this appeal from a judgment of the
Oregon Tax Court is whether the business inventory of tax-
payers subject 	to 	central assessment 	pursuant to 	ORS
308.505 to 308.665 is exempt from ad valorem property tax-
ation under ORS 307.400. The Tax Court concluded that the
Department of Revenue (department) had incorrectly deter-
mined that, because Northwest Natural Gas Company (tax-
payer) is subject to central assessment, its inventory is not
exempt under the business inventory exemption. Northwest
Natural Gas Co. v. Dept. of Rev., 19 OTR 367, 2007 WL
4127669 (2007) (Northwest Natural 1). For the reasons dis-
cussed below, we hold that the business inventory exemption
applies generally to exempt the "inventory" of all taxpayers-
including centrally assessed companies. Accordingly, 	we
affirm the decision of the Tax Court.
I. 	RELEVANT STATUTES
An understanding of the central assessment stat-
utes and the business inventory exemption statute will pro-
vide helpful context for our discussion of the factual and pro-
cedural background below. Accordingly, we discuss those
statutes at this point.
Certain property in Oregon is centrally assessed by
the department, rather than locally assessed by individual
counties. The central assessment statutes, ORS 308.505 to
308.665, 1 are a subset of the chapter of the tax code pertain-
ing to assessment of property for taxation, ORS chapter 308.
Some provisions of that chapter outline the general assess-
ment scheme. See ORS 308.005 - 308.343 (containing provi-
sions relating to assessment generally). The bulk of ORS
1 The tax years at issue in this case are 2002-03 to 2005-06. The applicable tax
code statutes during those years did not substantively change. Thus, all references
to the Oregon Revised Statutes are to the 2005 version. We also note that the par-
ties relied on the 2005 version of the statutes in their briefs before this court.
Certain legislative amendments to the central assessment statutes went into
effect January 2, 2009. Those amendments are intended to "modernize and clarify
the central assessment statutory law, while continuing the central assessment sys-
tem as it currently operates.'' Or Laws 2009, ch 128, § 1(3). The changes "do not
constitute a change in the policies of the State of Oregon with respect to the central
assessment system[.]" Id. § 1(4). Those most recent amendments, whatever their
effects, do not apply to this case.

539
chapter 308, however, consists of sections devoted to the
assessment of particular types of properties, such as, inter
alia, homes for the elderly, industrial plants, various types of
residences, and designated utilities and companies subject to
central assessment. ORS 308.408 - 308.905; see also D. R.
Johnson Lumber Co. v. Dept. of Rev., 318 Or 330, 335-36, 866
P2d 1227 (1994) (describing the particular and general pro-
visions of ORS chapter 308). ORS 308.515(1) designates the
utilities and companies subject to central assessment:
"The Department of Revenue shall make an annual
assessment of any property that has a situs in this state
and * * * is used or held for future use by any company in
performing or maintaining any of the following businesses
or services or in selling any of[ certain] commodities* * *."
The particular commodities listed in the statute include,
among others, "[r]ailroad transportation," "[a]ir transporta-
tion," "[c]ommunication," "[h]eating" and, most pertinent
here, "[g]as." ORS 308.515(1)(a) - (n).
ORS 308.510(1) defines the scope of "property" sub-
ject to central assessment for companies identified in ORS
308.515(1). That statute provides, in part:
" 'Property,' as used in ORS 308.505 to 308.665, includes all
property, real and personal, tangible and intangible, used
or held by a company as owner, occupant, lessee or other-
wise, for or in use in the performance or maintenance of a
business or service or in a sale of any commodity, as set
forth in ORS 308.515, * * *and includes but is not limited to
* * * appliances, * * * merchandise, inventories, * * * and
all other goods or chattels."
Any property that is not "centrally assessed" is "locally
assessed" by the county where the property is located. ORS
308.517(5).
Finally, we turn to the business inventory exemp-
tion statute at issue in this case, ORS 307.400. That exemp-
tion is not part of the general assessment provisions or the
central assessment statutory scheme in ORS chapter 308.
Rather, it is found in the statutes outlining more generally
property that is subject to taxation and exemption, ORS
chapter 307. ORS 307.400 provides:

540 	Northwest Natural Gas Co. v. Dept. of Rev.
"Items of tangible personal property consisting of inven-
tory, including but not limited to materials, supplies, con-
tainers, goods in process, finished goods and other personal
property owned by or in possession of the taxpayer, that are
or will become part of the stock in trade of the taxpayer held
for sale in the ordinary course of business, are exempt from
ad valorem property taxation."
Again, the parties dispute whether taxpayer, as a
centrally assessed company, is entitled to the benefit of that
exemption. 	Cast against the 	backdrop of the 	statutory
scheme, the issue, more precisely, is whether the business
inventory exemption found in ORS chapter 307 applies to the
centrally assessed property provisions contained in ORS
chapter 308.
II. 	FACTUAL AND PROCEDURAL BACKGROUND
With those statutory provisions in mind, we turn to
the factual and procedural background that gave rise to this
appeal. Our summary is taken from the stipulated facts sub-
mitted to the Regular Division of the Oregon Tax Court and
from the record.
Taxpayer is an Oregon corporation "engaged pri-
marily in the distribution and sale of natural gas to custom-
ers" in the Pacific Northwest. Taxpayer is centrally assessed
by the department pursuant to ORS 308.515(1). The tax
years subject to this appeal are 2002-03 to 2005-06. During
those tax years, taxpayer stored natural gas in two liquefied
natural gas storage facilities in Portland and Newport, and in
four to six underground natural gas storage facilities near
Mist (gas reserves).2 Taxpayer also owned and operated a
retail store in Portland. 3 The store offered an array of appli-
ances-both gas and electric-for sale to the general public
2 Two of the underground natural gas storage facilities became available dur-
ing the 2005-06 tax year and are not under appeal for the remainder of the tax
years at issue.
In addition to the Portland store. taxpayer owned and operated stores in
Salem, Albany, and Eugene. The Salem store was in operation during the 2002-03
and 2003-04 tax years, the Albany and Eugene stores were in operation during the
2002-03 to 2004-05 tax years, and the Portland store was in operation during all
the subject tax years. As explained below, 347 Or at 541n6, only the appliances
assessed during the 2005-06 tax year-those sold at the Portland retail store-are
at issue on appeal.

Cite as 	541
(retail appliances). The parties have stipulated that tax-
payer's gas reserves and retail appliances are "tangible per-
sonal property" and "inventory" or "inventories" within the
common, ordinary meaning of those terms. The parties fur-
ther agree that taxpayer's gas reserves are property subject
to central assessment under ORS 308.510(1). The parties dis-
pute, however, whether taxpayer's retail appliances are also
subject to central assessment.
The department issued taxpayer notices of proposed
assessment for taxpayer's centrally assessable property for
the subject years. The proposed assessment included values
for both taxpayer's gas reserves and retail appliances. 4
In 2004, taxpayer petitioned the department for the
2002-03, 2003-04, and 2004-05 tax years to exercise its super-
visory authority to correct the tax rolls pursuant to ORS
306.115. 5 Taxpayer sought a reduction in its assessed value,
arguing that its gas reserves were exempt from ad valorem
property taxation pursuant to the business inventory exemp-
tion, ORS 307.400. The petition did not include taxpayer's
retail appliances. The department denied supervisory relief,
reasoning that taxpayer's gas reserves were not exempt from
taxation under the business inventory exemption, because
taxpayer is subject to the central assessment provisions, ORS
308.505 - 308.665, which expressly include "inventories" as
part of the definition of"property'' that is assessable.
In 2005, taxpayer also appealed to the department
for the 2005-06 tax year. Taxpayer sought a reduction in its
assessed value, again arguing that its inventory was exempt
from 	taxation. 	Taxpayer's appeal included both its gas
reserves and retail appliances for the 2005-06 tax year. 6 The
department denied the appeal on the same grounds.
4 The proposed assessment values for taxpayer's gas reserves for each tax
year were $38,204,470, $46,233,603, $38,883,344, and $50,190,503, respectively.
The respective values of taxpayer's retail appliances were $809,018, $595,480,
$604,359, and $441,066.
5 ORS 306.115 provides, in part, that under its supervisory powers, "the
department may order the correction of clerical errors, errors in valuation or the
correction of any other kind of error or omission in an assessment or tax roll" as
provided under the statute.
Because taxpayer included its retail appliances only in its 2005-06 appeal,
only the 2005-06 assessment of taxpayer's retail appliances is at issue in this
appeal.

542 	Northwest Natural Gas Co. v. Dept. of Rev.
Taxpayer appealed both cases to the Magistrate
Division of the Tax Court. The Magistrate Division consoli-
dated the two cases, which were then specially designated to
the Regular Division of the Tax Court on petition of both par-
ties. Before the Regular Division of the Tax Court, the parties
filed cross-motions for summary judgment on the legal issue
of whether the subject properties (taxpayer's gas reserves
and retail appliances) are tax exempt under the business
inventory exemption, ORS 307.400. Taxpayer argued, based
on the text and context of the business inventory exemption,
that the legislature intended the exemption to apply to cen-
trally assessed and locally assessed property alike. Alterna-
tively, taxpayer contended that, if the business inventory
exemption statute did not apply to centrally assessed prop-
erty, taxpayer's retail appliances were not subject to central
assessment and, thus, were exempt nonetheless.
The department responded that taxpayer's "inven-
tories" were taxable, because all property subject to central
assessment is taxable, except as specifically provided by the
central 	assessment 	statutes. 	The 	department 	further
asserted that taxpayer's retail appliances were subject to
central assessment, and thus not exempt for the same
reason.
The 	Tax 	Court 	granted 	taxpayer's 	motion 	in
part and granted the department's cross-motion in part.
Northwest Natural I, 19 OTR at 380-81. The court agreed
with taxpayer that the business inventory exemption applied
to centrally assessed property and, thus, to taxpayer's inven-
tory. Accordingly, the court held that taxpayer's gas reserves
were exempt from taxation. As to the retail appliances, the
court held that, because taxpayer's retail appliances were not
included in its petition for the 2002-03 to 2004-05 tax years,
the department did not exercise discretion that could be
reviewed by the Tax Court for those tax years. Id. at 380. The
court ordered supplemental briefing as to whether the 2005-
06 appeal to the department included the retail appliances.
Id. at 381.
The department moved for reconsideration and stip-
ulated that taxpayer's retail appliances were included in tax-
payer's appeal for the 2005-06 tax year. The Tax Court

Cite as 347 Or 536 (2010) 	543
denied reconsideration and determined that, based on the
department's stipulation, taxpayer's retail appliances for the
2005-06 tax year were subject to the court's original decision
and, thus, exempt from taxation. Northwest Natural Gas Co.
v. Dept. of Rev., 19 OTR 481, 482, 487, 2008 WL 2727238
(2008) (Northwest Natural II). The department appealed.
ORS 305.445.
III. 	ANALYSIS
On appeal to this court, the department challenges
the Tax Court's determination that taxpayer's gas reserves
and retail appliances are exempt from ad valorem property
taxation pursuant to the business inventory exemption stat-
ute, ORS 307.400. We review decisions of the Tax Court for
"errors or questions of law or lack of substantial evidence in
the record to support the tax court's decision or order." ORS
305.445.
As we have described, this dispute involves two types
of property owned by taxpayer: gas reserves and retail appli-
ances. The parties agree that each property is "inventory''
under the plain, natural, and ordinary meaning of that term.
The parties also agree that taxpayer's gas reserves are "prop-
erty" 	subject 	to 	central 	assessment 	pursuant 	to 	ORS
308.510(1). Thus, the sole issues on appeal are whether ORS
307.400, the business inventory exemption statute, applies to
the property of centrally assessed taxpayers, and if not,
whether taxpayer's retail appliances are subject to local, not
central assessment, and therefore exempt nonetheless.
We begin with the pivotal issue on which the Tax
Court's decision turned-whether the business inventory
exemption applies to the property of centrally assessed tax-
payers. To analyze that issue, we must interpret the business
inventory statute-a task that involves examining the text
and context of the statute and any pertinent legislative his-
tory that the parties have proffered, giving that history such
weight, if any, as it appears to merit. State v. Gaines, 346 Or
160, 171-72, 206 P3d 1042 (2009).
We turn to the text of the tax exemption statute at
issue in this case-the business inventory exemption statute,

544 	Northwest Natural Gas Co. v. Dept. of Rev.
ORS 307.400. As noted, that statute provides an exemption
from ad valorem property tax for
"[i]tems of tangible personal property consisting of inven-
tory, including but not limited to materials, supplies, con-
tainers, goods in process, finished goods and other personal
property owned by or in possession of the taxpayer, that are
or will become part of the stock in trade of the taxpayer held
for sale in the ordinary course of business * * *."
ORS 307.400 (emphases added).
On its face, the statute's text contains no limiting
terms that operate to remove centrally assessed taxpayers or
their centrally assessed property from the benefits of the
exemption. Rather, the statute exempts inventory that is or
will become part of the "stock in trade of the taxpayer held for
sale in the ordinary course of business." (Emphasis added.)
That generic reference to "the taxpayer" does not differenti-
ate between taxpayers whose property is locally or centrally
assessed. Thus, the plain text of the statute supports tax-
payer's contention that the business inventory exemption
applies equally to local1y and centrally assessed taxpayers.
The department, for its part, does not contend other-
wise. Rather than rely on the text of the statute, the depart-
ment's arguments are twofold. First, the department asserts
that, for purposes of the business inventory exemption, the
definitions in ORS 307.020 control, and those definitions
remove centrally assessed taxpayers from their scope. Sec-
ond, the department urges, based on the taxation scheme
more generally, that the legislature never intended the busi-
ness inventory exemption to apply to taxpayers or property
subject to central assessment.
A. 	The 	relationship 	between 	ORS 	307.020 	and 	ORS
307.400.
We begin with the department's reliance on the def-
initions contained in ORS 307.020. The business inventory
exemption statute exempts "[i]tems of tangible personal
property consisting of inventory[.]" (Emphasis added.) The
term 	"tangible 	personal 	property" 	is 	defined 	in 	ORS
307.020(1)(c) as follows:

Cite as 347 Or 536 (2010) 	545
"As used in the property tax laws of this state, unless
otherwise specifically provided:
"* * * * *
"(c) 	'Tangible personal property' includes but is not
limited to all chattels and movables, such as boats and ves-
sels, merchandise and stock in trade, furniture and per-
sonal effects, goods, livestock, vehicles, farming imple-
ments, movable machinery, movable tools and movable
equipment."
As that statute provides, the definitions provided in
ORS 307.020(1) apply to the entirety of the Oregon tax code,
unless the legislature expressly provides otherwise. ORS
307.020(2) embodies just such an express exception, and spe-
cifically provides that the definitions contained in ORS
307.020(1), including the definition of "tangible personal
property," do not apply to "any person, company, corporation
or association covered by [the central assessment statutes,]
ORS 308.505 to 308.665."7
The department essentially urges this court to con-
clude that, because the statutory definition of "tangible per-
sonal property" does not apply to centrally assessed taxpay-
ers, their property is not within the scope of property subject
to the business inventory exemption statute, ORS 307.400.
That argument is predicated on the department's view that
ORS 307.400 exempts only "tangible personal property" as it
is defined in ORS 307.020.
The department's argument has two flaws in its
logic. First, ORS 307 .020 is a definitional provision only. It
merely defines what is encompassed in various types of per-
sonal property, including "tangible personal property," for
one class of taxpayer-i.e., locally assessed taxpayers. The
fact that the definitions in that statute do not apply to cen-
trally assessed taxpayers does not mean that no other defi-
nition applies. Neither does it mean that centrally assessed
taxpayers do not own the types of property that ORS 307.020
7 ORS 307.020(1) contains definitions for "intangible personal property" and
"personal property," as well as "tangible personal property." Pursuant to ORS
307.020(2), none of those definitions applies to centrally assessed companies.

546 	Northwest Natural Gas Co. v. Dept. of Rev.
defines, including tangible personal property, for tax pur-
poses.8 Rather, it means only that what qualifies as "tangible
personal property" for centrally assessed taxpayers is deter-
mined by some other source oflaw. That source oflaw is ORS
308.510(1), which, as earlier quoted, provides that the "prop-
erty" of centrally assessed taxpayers, for tax purposes,
includes "all property, real and personal, tangible or intangi-
ble***." See also ORS 307.030 (intangible personal property
held by centrally assessed taxpayers is subject to assessment
and taxation). Although the legislature did not set forth an
express definition of "tangible personal property" in ORS
308.510(1) as it applies to centrally assessed taxpayers, that
fact means only that we look to the common, ordinary mean-
ing of the term to determine what property, when held by a
centrally assessed taxpayer, qualifies as "tangible personal
property." See Friends of Parrett Mountain v. Northwest
Natural Gas Co., 336 Or 93, 114, 79 P3d 869 (2003) (we give
terms that do not have special statutory definitions or any
well-understood legal meaning their plain, natural, and ordi-
nary meanings).
The second flaw in the department's argument is its
assumption that the business inventory exemption, as set
forth in ORS 307.400, extends only to "tangible personal
property" as defined in ORS 307.020. By its terms, the busi-
ness inventory exemption is not so limited. As we have
described, it does not distinguish between types of taxpayers
or otherwise differentiate between locally assessed and cen-
trally assessed taxpayers. Neither does it incorporate only a
single definition of"tangible personal property." Nothing pre-
cludes the legislature from defining that term differently for
8 To some degree, the department's argument proves too much. That is, a lit-
eral application of the department's proposed interpretation of ORS 307.020(2)
would result in removing centrally assessed taxpayers not only from the business
inventory exemption statute, but also from any other statutes in the tax code that
apply to "tangible personal property," "intangible personal property" and "personal
property"-including the provisions that subject such taxpayer's property to
assessment and taxation. See, e.g., ORS 307.030(1) ("All real property within this
state and all tangible personal property situated within this state, except as other-
wise provided by law, shall be subject to assessment and taxation in equal and rat-
able proportion." (Emphasis added.)).

Cite as 347 Or 536 (2010) 	547
different taxpayers, while still providing those different tax-
payers with a common exemption for their tangible personal
property, however defined, if it otherwise qualifies as busi-
ness inventory. As a matter of plain text, that is what the leg-
islature appears to have done.
In arguing to the contrary, the department places
significant reliance on this court's decision in Saunders v.
Dept. of Rev., 300 Or 384, 711 P2d 961 (1985). In Saunders, a
locally assessed taxpayer sought a determination that cer-
tain farm structures qualified for the business inventory
exemption under ORS 307.400. 300 Or at 386. This court
explained that, to qualify for that exemption, the property
must meet two requirements: (1) the "movable" requirement
contained in ORS 307.020 ("tangible personal property"
includes all chattels and "movables"); and (2) the "use"
requirement contained in ORS 307.400 (property that is or
will become part of the stock in trade of the taxpayer held
for sale in the ordinary course of business). The parties in
Saunders agreed that the subject property satisfied the "use"
requirement, but disputed whether it was "movable" for pur-
poses of ORS 307.020. 300 Or at 387.
This court held that the subject property was not
"movable" as ORS 307.020 requires, because it was real prop-
erty, not tangible personal property. 300 Or at 387, 391. In
reaching that conclusion, this court relied on 1977 legislative
amendments to the predecessor business inventory exemp-
tion statute, former ORS 310.608 (1975), renumbered as ORS
307.400 (1981). 300 Or at 388-89. Those amendments had
come after the Tax Court's decision in Eastern Ore. Farming
Co. et al v. Dept. of Rev., 7 OTR 74, 79, 1977WL1599 (1977),
in which the Tax Court had held that "[t]he distinction
between real and personal property is irrelevant" in deter-
mining whether property is "inventory" subject to exemption
under former ORS 310.608. Rather, the Tax Court deter-
mined, it was sufficient if the subject property came within
the "special definition" of "inventory" contained in the busi-
ness inventory exemption itself (former ORS 310.608). 7 OTR
at 79-80.
Following the decision in Eastern Ore. Farming Co.,
the legislature retroactively amended the business inventory

548 	Northwest Natural Gas Co. v. Dept. of Rev.
exemption statute to effectively overrule that case by limiting
the exemption to tangible personal property. See Or Laws
1977, ch 819, § 1(3). 9 Based on that amendment, this court
concluded:
"It is clear from the statute and the legislative history
that the legislature intended that the exemption from ad
valorem taxes now codified in ORS 307.400 apply only to a
category of tangible personal property defined in ORS
307.020(3). Because only tangible personal property quali-
fies for the exemption under ORS 307.400, we must deter-
mine if [the subject property is] real or personal property
under ORS chapter 307. For purposes of taxation the defi-
nitions in ORS 307.010(1) and ORS 307.020(3) control."
Saunders, 300 Or at 389. The court determined that the sub-
ject property did not qualify as "tangible personal property''
under ORS 307.020 and, accordingly, held that it was not
subject to the business inventory exemption under ORS
307.400. 300 Or at 391.
The department asserts that taxpayer's property is
not subject to the business inventory exemption because,
under Saunders, that exemption applies only to the "tangible
personal property" defined in ORS 307.020-a term that does
not apply to taxpayer as a centrally assessed company. We do
not read Saunders so broadly. Certainly, Saunders stands for
the proposition that property must be "tangible personal
property" held for sale to qualify as "inventory" under ORS
307.400. But the holding in Saunders has to be understood in
the context of the particular issue that the case presented.
Because the taxpayer in Saunders was a locally assessed tax-
payer, this court appropriately required the subject property
in that case to satisfy the definition of "tangible personal
property" under ORS 307.020-the definition that applies to
locally assessed taxpayers. This court was not presented with
an issue entailing how the provisions of ORS 307.020, ORS
307.400, and the central assessment statutes are to be read
together, and its holding properly cannot be understood to
9 The legislature amended subsection (3) of the statute to read:
"As used in subsection (1) of this section, 'inventory' means the following
tangible personal property: * * *"
Or Laws 1977, ch 819, § 1(3) (emphasis added).

Cite as 34 7 Or 536 (2010) 	549
resolve that question. Accordingly, Saunders does not affect
our understanding of the plain text of ORS 307.400 and its
interrelationship with ORS 307.020.
We have, however, examined the legislative history
of ORS 307.020 to determine whether it reveals a contrary
intent-that is, whether the legislature, in excluding cen-
trally 	assessed 	taxpayers 	from 	the 	definitions 	in 	ORS
307.020(1), intended to remove centrally assessed property
from the scope of property subject to the business inventory
exemption statute. See Gaines, 346 Or at 172 (court will con-
sult legislative history even if the court does not perceive an
ambiguity in the statute's text). We find nothing in the per-
tinent history to support that conclusion.
What is now subsection (2) of ORS 307.020 was
added to the statute in 1977 as part of Senate Bill (SB) 113.
Or Laws 1977, ch 602, § 1(4). SB 113 made three distinct
amendments to the tax code: (1) it expanded the definition of
"intangible personal property" in ORS 307.020(1) to include
information-storage media; (2) it excluded certain "intangible
property" from the definition of "property" subject to central
assessment under ORS 308.510(1); and (3) it clarified that
the property of centrally assessed companies was not subject
to the definitions contained in ORS 307.020-at that time,
"intangible personal property," and "tangible personal prop-
erty." Or Laws 1977, ch 602, §§ 1, 2.
The main purpose of SB 113 was the first that we
identified, to expand the definition of "intangible personal
property" to include certain information-storage media. Tape
Recording, Senate Revenue and School Finance Committee,
SB 113, Jan 24, 1977, Tape 3, Side 1 (statement of Richard A.
Munn, Legislative Revenue Officer). The primary concern
behind the bill was that counties were treating the property
of 	title 	companies 	inconsistently-some 	counties 	were
assessing and taxing information-storage media; others were
not. Id. (statement of Don Fisher, Department of Revenue).
In hearings on the bill, the department clarified that
the bill amended only the definition of "intangible personal
property" and did not alter what property was taxable or
exempt. See Tape Recording, Senate Revenue and School
Finance Committee, SB 113, Mar 21, 1977, Tape 17, Side 1

550 	Northwest Natural Gas Co. v. Dept. of Rev.
(statement of Ted De Looze, Department of Revenue) ("This
only defines this type of property. It does not say what is tax-
able or what is not taxable. You have to go to the other pro-
visions of the law.* * * [W]e did not intend this as the rule as
to whether it is taxable or not."). However, the 1977 amend-
ments indirectly exempted more personal property for locally
assessed taxpayers, because those amendments broadened
the 	definition 	of "intangible 	personal 	property"; 	locally
assessed taxpayers are exempt from being taxed on such
property. See ORS 307.030(2) ("Except as provided in [the
central assessment statutes,] ORS 308.505 to 308.665, intan-
gible personal property is not subject to assessment and tax-
ation."); 	Tape 	Recording, 	Senate 	Revenue 	and 	School
Finance Committee, SB 113, Mar 21, 1977, Tape 17, Side 1
(statement of Ted De Looze) (admitting that SB 113 "maybe
indirectly" affects the personal property subject to exemp-
tion). Consequently, the department recommended expand-
ing the definition of"intangible personal property" to include
information-storage media, because that property was diffi-
cult for assessors to value and, thus, should come within the
exemption 	for 	intangible 	personal 	property 	for 	locally
assessed taxpayers. Tape Recording, Senate Revenue and
School Finance Committee, SB 113, Jan 24, 1977, Tape 3,
Side 1 (statement of Don Fisher).
Unlike that oflocally assessed taxpayers, the "intan-
gible property" of centrally assessed taxpayers is taxed. ORS
307.030(2); ORS 308.510(1). Utilities requested that the
amended definition of "intangible personal property" not
apply to them, because they did not want to be burdened with
the difficulty of identifying the values of information-storage
media on their annual statements to the department. See
Tape 	Recording, 	Senate 	Revenue 	and 	School 	Finance
Committee, SB 113, May 6, 1977, Tape 24, Side 1 (statement
of Sen Victor Atiyeh) (opining that separating intangible
property in central assessment appraisal process would cre-
ate 	more 	problems for 	centrally assessed companies in
recordkeeping than it would change in value for the utility).
The utilities also did not want to disturb prior court cases
classifying their property as either tangible or intangible
property. See Tape Recording, House Revenue and School
Finance Committee, SB 113, June 28, 1977, Tape 37, Side 1

Cite as 347 Or 536 (2010) 	551
(statement of Assistant Attorney General Ira Jones). The leg-
islature responded to the requests of the utilities and added
what is now subsection (2) of ORS 307.020 to exclude cen-
trally assessed taxpayers from the amended and expanded
definition 	of "intangible personal 	property" so that the
"intangible personal property" defined under that statute
was not included in the "property" of centrally assessed cor-
porations. Or Laws 1977, ch 602, § 1(4); Southern Pacific
Trans. Co. v. Dept. of Rev., 295 Or 47, 62 n 17, 664 P2d 401
(1983) (SB 113 excluded centrally assessed taxpayers from
the expanded definition of intangible personal property).
Also as part of SB 113, the legislature simultane-
ously amended ORS 308.510(1) to exclude certain "intangible
property" from the definition of "property" subject to central
assessment. Or Laws 1977, ch 602, § 2. In doing so, the leg-
islature was codifying the department's practice of not taxing
specific intangible property for centrally assessed companies.
See Tape Recording, House Revenue and School Finance
Committee, SB 113, June 28, 1977, Tape 37, Side 1 (state-
ment oflra Jones) (explaining that bill codified department's
policy of not valuing certain types of intangible property of
centrally assessed companies, such as money at interest,
bonds, notes, etc.).
lfwe glean anything from the legislative history, it is
that the legislature did not consider the effect of SB 113 on
the exemption for tangible personal property consisting of
inventory. Rather, the legislature's purpose in enacting SB
113 was to define the intangible personal property oflocally
assessed and centrally assessed taxpayers differently-in
effect, to expand the scope of exempted intangible personal
property for locally assessed taxpayers and to narrow the
scope of taxed intangible property for centrally assessed tax-
payers. True, the 1977 amendments to ORS 307 .020 removed
centrally assessed taxpayers not only from the statutory def-
inition of intangible personal property, but also from the stat-
utory definition of tangible personal property. See Or Laws
1977, ch 602, § 1(4). However, considering the bill's focus on
intangible personal property, we decline to conclude that the
legislature, in doing so, intended that provisions in the tax
code applying to "tangible personal property"-including

552 	Northwest Natural Gas Co. v. Dept. of Rev.
ORS 307.400-would no longer apply to centrally assessed
taxpayers.
Accordingly, we agree with the Tax Court that,
although the definition of "tangible personal property" in
ORS 307 .020 does not apply to centrally assessed companies,
it does not follow that the business inventory exemption stat-
ute, ORS 307.400, does not apply to those taxpayers. Rather,
it means only that, for centrally assessed taxpayers, the term
"tangible personal property" in ORS 307.400 is not statuto-
rily defined. That, in turn, means that we will look to the
plain, natural, and ordinary meaning of the term to deter-
mine its meaning. If the property is "tangible personal prop-
erty" under the plain and ordinary meaning of that term (and
also meets the use requirement under ORS 307.400, viz., that
the property 	or will be stock in trade held for sale in the
ordinary course of business), then the property is entitled to
the business inventory exemption.
B. 	The department's alternative contentions.
We next address the department's alternative argu-
ments that, even if ORS 307 .020 does not render the business
inventory exemption inapplicable to centrally assessed tax-
payers, the statutory scheme as a whole demonstrates that
the legislature did not intend the business inventory exemp-
tion to apply to centrally assessed taxpayers. The depart-
ment relies on the following in support of that contention:
(1) contextual provisions in ORS chapter 307 and the central
assessment statutory scheme; (2) the legislative history of
ORS 307.400; and (3) the method of valuation for centrally
assessed property. We consider each in tum.
1. 	ORS chapter 307's relationship to the central assess-
ment scheme
The department's first theory is that certain contex-
tual clues in the statutory scheme reveal that the legislature
did not intend the business inventory exemption to apply to
centrally assessed property: (1) "inventories" of centrally
assessed taxpayers are expressly assessable; and (2) the busi-
ness inventory exemption statute neither expressly refer-
ences the central assessment statutes, nor is it part of the

Cite as 34 7 Or 536
central assessment scheme. As we explain below, none of the
department's propositions is convincing.
According to the department, the fact that the legis-
lature expressly included "inventories" as "property'' that is
assessable under ORS 308.510(1) demonstrates that the leg-
islature did not intend to exempt that property from taxation.
The department's contention on that point is necessarily
premised on its view that "assessment" is synonymous with
"taxation." That is, the department urges that "[a]ll property
listed in ORS 308.510(1) is taxable under the central assess-
ment statutes, if used or held by a company in a business des-
ignated as centrally assessed under ORS 308.515." Because
the term "inventories" is included in the scope of centrally
assessed "property," the department contends inventories
are, in turn, taxable. Taxpayer, on the other hand, argues
that it is irrelevant whether "inventories" [are] included in
the scope of property that is centrally assessed, because that
merely determines how the property is to be assessed (i.e.,
centrally or locally), not whether it is taxed.
We 	decline 	to 	engage 	in 	the 	complicated 	and
nuanced analysis of whether and when "assessment" is "tax-
ation." That is so, because, even if we were to agree with the
department that, as a general rule, property that is assessed
is ultimately taxed, the legislature has clearly demonstrated
that there are express exceptions. That is, some "property"
expressly assessable under ORS 308.510(1) ("all property"
used or held by a company under ORS 308.515(1) required to
be centrally assessed) is exempt from taxation. See, e.g., ORS
308.558(5) (exempting aircraft of foreign-owned carriers);
ORS 308.559(2)(a) (exempting aircraft undergoing major
work); 	ORS 308.665(1) (exempting private railroad cars
undergoing major work). Accordingly, the department's con-
tention is refuted by the statutory scheme itself. 10
10 Neither does the legislative history of ORS 308.510(1) provide support for
the department's contention. The legislature added the term "inventories" to ORS
308.510(1) in 1957, years before the personal property tax imposed on "inventory"
was phased out under the predecessor statutes to ORS 307.400 in 1965. See Or
Laws 1957, ch 711, § 2. Accordingly, the legislature did not consider how adding
"inventories" to centrally assessed property would he affected by the later-enacted
business inventory exemption. Rather, the legislature added the term "invento-
ries," as well as other terms, to clarify that certain utility property was to he
assessed by the department (then the State Tax Commission), rather than county
assessors. Minutes, Senate Taxation Committee, Apr 30, 1957, 4.

554 	Northwest Natural Gas Co. v. Dept. of Rev.
The department next asserts that when the legisla-
ture provides a tax exemption for centrally assessed prop-
erty, it does so only by either codifying the exemption within
the central assessment scheme (i.e., ORS 308.505 to 308.665)
or by expressly referencing the central assessment statutes.
According to the department, because the business exemp-
tion statute meets neither criterion, it does not apply to cen-
trally assessed taxpayers.
We disagree with the department's premises and,
therefore, with its conclusion. We first disagree with the
department's contention that, when the legislature has pro-
vided a tax exemption for centrally assessed taxpayers, it has
done so only within the central assessment statutory scheme.
True, the central assessment statutes do contain provisions
that exempt centrally assessed property from taxation, as
well as provisions that designate certain property as not cen-
trally assessable. See, e.g., ORS 308.558(5) (exempting air-
craft of foreign-owned carriers); ORS 308.559(2)(a) (exempt-
ing 	aircraft 	undergoing 	major 	work); 	ORS 	308.665(1)
(exempting private railroad cars undergoing major work);
ORS 308.510(1) (excluding certain intangible property from
central 	assessment); 	ORS 	308.515(3) 	(excluding 	specific
property from central assessment--e.g., property of inter-
state ferries). However, those provisions, by their terms,
apply only to centrally assessed property, and not to locally
assessed property. See ORS 308.510(1) ("intangible personal
property" subject to central assessment); ORS 308.515(1)
(property of air transportation, water transportation, and
private railcar transportation companies subject to central
assessment). It makes particular sense for the legislature to
include them in the central assessment scheme because, as a
practical matter, they apply to nothing else. The fact that the
legislature 	has 	included 	tax 	exemptions 	for 	centrally
assessed property in the central assessment scheme thus
does not foreclose the possibility that it has and also would do
so through the exemption and taxation provisions in ORS
chapter 307. Rather, an exemption that applies more gener-
ally to both locally and centrally assessed property would
more appropriately be located in ORS chapter 307-a chap-
ter of general applicability.

Cite as 347 Or 536 (2010) 	555
To the extent that the department suggests that
ORS chapter 307 and the central assessment statutes are
two separate schemes of taxation-in addition to separate
schemes for assessment-we further disagree. The legisla-
ture has expressly differentiated the assessment processes
for centrally assessed and locally assessed property. See ORS
308.005 - 308.343 (general assessment scheme); ORS 308.505
- 308.665 	(central 	assessment 	scheme); D. 	R. 	Johnson
Lumber Co., 318 Or at 335-36 (explaining the provisions of
general applicability and the particular assessment schemes
in ORS chapter 308). ORS chapter 307, on the other hand, is
not about assessment at all. It is a chapter pertaining to tax-
ation and exemption, and contains no provision limiting its
application to locally assessed taxpayers. Thus, ORS chapter
307 is a chapter of general applicability. At the very least, if
the legislature intended to create a separate system of taxa-
tion and exemption for centrally and locally assessed taxpay-
ers, it has neither declared as much nor structured the stat-
utes in that way.
We acknowledge that, in certain circumstances, the
legislature has expressly treated the taxation and exemption
of the two categories of taxpayers differently. See, e.g., ORS
307.030(2) (taxing intangible personal property of centrally
assessed taxpayers and exempting it for all others).11 But
that fact is further evidence that the taxation and exemption
provisions in ORS chapter 307 generally encompass centrally
assessed taxpayers, because the legislature has demon-
strated that it knows how to expressly exclude centrally
assessed taxpayers from those provisions when it opts to do
so. Because ORS 307.400 does not expressly remove centrally
assessed property from its reach, the most natural conclusion
11 See also ORS 307 .220 (exemption for certain property of nonprofit mutuals
or cooperative telephone associations "shall not apply to any parcel ofland or build-
ing owned by any such association, which land or building shall be assessed and
apportioned by the [department] in accordance with existing law"); ORS 307 .330(1)
("[e]xcept for property centrally assessed by the [department]," certain commercial
facilities under construction are exempt from taxation); ORS 307.090(1) ("[e]xcept
as provided by law," certain public property is exempt from taxation); Pacificorp
Power Marketing u. Dept. of Rev., 340 Or 204, 211, 131 P3d 725 (2006) (central
assessment statutes provide for taxation of property otherwise exempt under ORS
307.090(1), the public property tax exemption, because that exemption statute con-
tains an "except as provided by law" clause).

556 	Northwest Natural Gas Co. v. Dept. of Rev.
to 	draw is, 	as we have 	described, 	that the legislature
intended that the exemption apply to centrally assessed and
locally assessed taxpayers alike.
The department disagrees and asserts that any pro-
visions that expressly remove centrally assessed property
from the scope of a statute's exemption are merely "redun-
dant." Citing Thomas Creek Lumber and Log Co. v. Dept. of
Rev., 344 Or 131, 138, 178 P3d 217 (2008), the department
argues that the legislature is not prohibited from "saying the
same thing twice." According to the department, the fact that
ORS 307.400 does not contain such a "redundant reference"
does not mean that its exemption must be applied to cen-
trally assessed property.
Again, we disagree. In Thomas Creek Lumber and
Log Co., this court adopted the department's proposed inter-
pretation of a tax code statute over the taxpayer's: "although
the department's interpretation * * * does lead to a redun-
dancy in [one subsection of the statute], taxpayer's interpre-
tation [was] more problematic,'' because it impermissibly
omitted words from and rendered entirely without effect a
subsection of another statute. Id. at 137. The court reasoned
that, although the department's interpretation made some
words in another statute redundant, "nothing prohibits the
legislature from saying the same thing twice." Id. at 138. The
court further reasoned that the department's interpretation
was preferable, because it would " 'give effect to' more of the
'provisions or particulars' of both statutes than [the] tax-
payer's proposed interpretation." Id. (quoting ORS 174.010).
Contrary 	to 	the 	department's 	position, 	Thomas
Creek Lumber and Log Co. does not stand for the broad prin-
ciple that an interpretation rendering provisions of a statute
redundant is generally permissible. The general rule is that
this court interprets statutes to give effect to all provisions.
See ORS 174.010 ("where there are several provisions or par-
ticulars such construction is, if possible, to be adopted as will
give effect to all"); Union Pac. R. R. Co. v. Bean, 167 Or 535,
549, 119 P2d 575 (1941) (a construction of a statute that ren-
ders certain provisions unnecessary will not be adopted by
the court, and "it should not be presumed that any provision
is redundant or useless"). Thomas Creek Lumber and Log Co.

Cite as 347 Or 536
does not conflict with that general rule. Rather, it stands for
the more modest proposition that an interpretation render-
ing a provision redundant is preferable when it gives effect to
more provisions or particulars of the applicable statutes than
would some other interpretation.
The department suggests that that would be the
case here, arguing that taxpayer's proposed interpretation
"omits and renders ineffective the substantive definition of
assessable property in the form of 'inventories,' 'appliances,'
'merchandise,' and 'all other goods' in ORS 308.510(1)." As
already noted, however, 34 7 Or at 553-54, property may be
both centrally assessed and exempt from taxation. Thus, tax-
payer's proposed construction would not render those provi-
sions 	inoperable. 	Moreover, 	even 	were 	we 	to 	assume,
arguendo, that taxpayer's proposed interpretation would ren-
der ineffective the provision in ORS 308.510(1) requiring
assessment 	of "inventories," 	the 	department's 	proposed
interpretation would render several more provisions-the
multiple provisions in ORS chapter 307 removing centrally
assessed 	taxpayers 	from 	the 	statutes' 	effect-useless.
Accordingly, the department's proposed construction is not
preferable under the circumstances.
We also disagree with the department that, when
the 	legislature 	provides 	a 	tax 	exemption 	for 	centrally
assessed property outside the central assessment scheme, the
legislature uniformly does so by expressly cross-referencing
the central assessment statutes. That contention is fore-
closed by the existence of exemption statutes in ORS chapter
307 that are silent as to central assessment, but that neces-
sarily apply to centrally assessed property. For example, as
the department concedes, ORS 307.126 (exempting Federal
Communications Commission licenses) applies to the prop-
erty of centrally assessed taxpayers under ORS 308.515(1)(n)
("[c]ommunication" companies 	subject to 	central assess-
ment), even though the statute does not refer expressly to
those taxpayers or otherwise reference the central assess-
ment statutes. See ORS 307.205 (exempting real property
owned by a railroad that is temporarily being put to a public
alternate transportation use). 12
12 We acknowledge that the legislature, in at least one provision in ORS chap-
ter 307, has used express language to bring centrally assessed taxpayers or

558 	Northwest Natural Gas Co. v. Dept. of Rev.
Based on the foregoing analysis of the text and con-
text, we conclude that the legislature did not intend to limit
the business inventory exemption statute, ORS 307.400, to
locally assessed taxpayers.
2. 	The legislative history of ORS 307.400
The department next asserts that the historical con-
text and legislative history of ORS 307.400 reveal that the
legislature intended to provide relief from the personal prop-
erty tax only as to locally assessed, not centrally assessed,
business inventory. The legislature first provided a partial
tax exemption for business inventory in 1965, under the
Inventory Tax Relief Act, codified at former ORS 310.605 to
310.625 (1965), repealed by Or Laws 1969, ch 612, § 5. See Or
Laws 1965, ch 604, §§ 1-12 (HB 1498). The Inventory Relief
Act reduced the personal property tax on inventory based on
a percentage calculation. Former ORS 310.605. The major
purposes of phasing out the taxation of inventory were to cre-
ate new businesses in Oregon, prevent employee cutbacks,
and reduce the seasonal aspect of Oregon's economy. 13 Tape
Recording, House Committee on Taxation, HB 1498, Mar 16,
properties within the statute's exemption. See ORS 307.090(3)(a) ("[n]otwith-
standing ORS 308.505 to 308.665," certain out-of-state publicly owned property is
exempt from taxation). That "notwithstanding" clause operates to override any
provisions in the central assessment statutes that conflict with ORS 307 .090(3)(a).
The clause comes after an "except as provided by law" clause in ORS 307.090(1)
that operates to remove centrally assessed property from the exemption. See
Pacificorp Power Marketing, 340 Or at 211 ("except as provided by law" clause
means that the exemption does not apply to centrally assessed property). Thus, the
"notwithstanding" clause is necessary to clarify that the exemption under subsec-
tion (3) of that statute applies to centrally assessed taxpayers, even though the
exemption in subsection (1) does not. Accordingly, that "notwithstanding" clause
does not support the contention that exemption statutes in ORS chapter 307 do not
apply to centrally assessed taxpayers unless the statutes expressly reference the
central assessment statutes.
' 3 Near the end of the calendar year, due to the personal property tax on inven-
tory, it was common for Oregon businesses to "bottom out" their inventory by ceas-
ing to buy additional inventory, cutting down on their fabricating crews, laying off
employees, discontinuing purchases of tools or equipment, and curtailing certain
production. Minutes, Senate Committee on Taxation, Apr 26, 1965, 7 (statement of
Charles Wright, Mercer Steel). The seasonal aspect of Oregon's economy, which
caused a "major force" in "temporary unemployment," made up a significant por-
tion of the testimony before the legislature both in 1965 and again in 1969. See, e.g.,
id. at 2-6; Tape Recording, House Committee on Taxation, HB 1498, Mar 16, 1965,
Tape 16, Side 1 (statement of Sen Victor Atiyeh); Minutes, Senate Committee on
Taxation, Apr 26, 1965, 4 (statement of James Sommers, Container Corporation);
Minutes, Senate Committee on Taxation, May 13, 1969, 2.

Cite as 34 7 Or 536 (2010) 	559
1965, Tape 16, Side 1 (statement of Sen Victor Atiyeh). The
legislature was also concerned with how the personal prop-
erty tax on inventory affected Oregon businesses' ability to
compete in the market, because other states had a relatively
small tax on inventory. See Minutes, Senate Committee on
Taxation, Apr 26, 1965, 3, 7.
In 1969, the legislature repealed the 1965 Inventory
Tax Relief Act, Or Laws 1969, ch 612, § 5, and enacted a per-
manent tax reduction program for the personal property tax
imposed on inventory, codified at former ORS 310.608 (1969),
renumbered as ORS 307.400 (1981). Or Laws 1969, ch 612,
§§ 1, 2 (HB 1214). Former ORS 310.608(1) provided an
exemption for the taxpayer's inventory, one that increased at
a rate of five percent per year for four years, and 10 percent
per year thereafter. A complete exemption was enacted in
1979. Or Laws 1979, ch 692, § 5. The statute was renumbered
as ORS 307.400 in 1981. During hearings on the 1969 bill,
the legislature again heard concerns from industry regarding
Oregon's 	seasonal 	economy. 	Minutes, 	Senate 	Taxation
Committee, May 13, 1969, 2 (statement of Douglas Heider,
Retail Council Director of Associated Oregon Industries). The
legislature expressed concern that Oregon was falling behind
other western states in inventory tax relief and was continu-
ing to lack competitiveness in the market. Id. (statement of
Rep Jason Boe).
The department cites portions of the 1965 Inventory
Tax Relief Act, as well as several statutes that predated that
act, in support of its contention that the legislature never
intended for the business inventory exemption to benefit cen-
trally assessed taxpayers. 14 The department's basic theory is
that centrally assessed property "was not subject to the
locally assessed ad valorem tax on inventory" (emphasis in
original) and, thus, was not intended to benefit from the
exemption.
14 See, e.g., former ORS 317.07 4 (1955), repealed by Or Laws 1969, ch 520, § 49
(providing centrally assessed companies a corporate excise tax offset for personal
property taxes paid); former ORS 317.085 (1955), repealed by Or Laws 1957, ch 607,
§ 10 (general corporate excise tax offset for personal property taxes paid); Or Laws
1965, ch 604, § 5 (1965 Inventory Tax Relief Act required counties to calculate and
report to State Tax Commission the "dollar amount of locally assessed inventory
taxes levied" (emphasis added) for the fiscal year).

560 	Northwest Natural Gas Co. v. Dept. of Rev.
We find nothing in either the 1965 Inventory Tax
Relief Act or the statutes predating that act that leads us to
conclude either that a separate "tax on inventory" existed or
that it applied only to locally assessed taxpayers. The prop-
erty tax imposed on inventory was the property tax on "tan-
gible personal property"-and that tax applied generally. See
ORS 307.030(1) (1965) ("[a]ll * * *tangible personal property
* * * shall be subject to assessment and taxation"). Further,
the main purpose behind the 1965 Inventory Tax Relief Act
convinces us that the legislature wanted to reduce-and ulti-
mately exempt-the personal property tax on inventory for
all Oregon businesses that held inventory for sale. As noted,
the legislature was concerned with the seasonal aspect of
Oregon businesses holding inventory for sale, which affected
their ability to compete in the market because other states
were not taxing inventory. Considering the purpose behind
the legislation, we see no reason why a centrally assessed
company holding inventory for sale-and thus, suffering
from similar seasonal hardships-would not have been an
equal target of the 1965 and 1969 legislation. 15 Accordingly,
the legislative history provides no basis to conclude that the
legislature intended to exclude centrally assessed taxpayers
either from the phasing out of personal property tax imposed
on inventory, or from its ultimate exemption. 16
15 Certainly, the legislature recognized that the "small merchant" would espe-
cially benefit from the permanent inventory reduction program. Minutes, House
Committee on Taxation, Mar 24, 1969, 1. However, legislative recognition that a
sector of Oregon businesses (small merchants) would especially benefit from the
legislation more than others (large merchants and utilities) does not foreclose leg-
islative intent that those large entities-if also holding inventory for sale and,
thus, coming within the target of the legislation-also receive some benefit from
the legislation, even ifthat benefit would be less obvious or common. See Minutes,
Joint Ways and Means Committee, May 5, 1965, 275 (statement of Sen Victor
Atiyeh) (stating that helping merchants is one thing, but the most important
approach is to help the economy of Oregon). At the very least, there is simply noth-
ing in the legislative history to suggest that the legislature considered large utili-
ties and other centrally assessed companies and, in turn, intended to exclude them
from the ambit of the statute.
16 One version of the 1965 Inventory Tax Relief Act-a version that the legis-
lature ultimately rejected-provided for a "net business tax" to replace revenue lost
from the phase-out of property tax on inventory. See Minutes, Senate Committee
on Taxation, Apr 26, 1965, 1, 2 (statement of Sen Victor Atiyeh) (explaining net
business tax proposed by the House). The department relies on testimony from
Douglas Heider, Retail Council Director of Associated Oregon Industries, at an
August 8, 1964, meeting of the Interim Committee on Taxation, in which Heider

Cite as 347 Or 536 (2010) 	561
3. 	Method of valuation for centrally assessed property
Under its third theory, the department asserts that
the method of valuation prescribed by the legislature for cen-
trally assessed property is not conducive to identifying, val-
uing, or exempting inventory. In assessing property subject
to central assessment, the department's assessors engage in
"unit valuation" based on information provided by the com-
pany in its annual statement. ORS 308.520; ORS 308.555.
The unit valuation includes property both within and with-
out the State of Oregon. ORS 308.555. Once the department
ascertains the assessable property in Oregon, it apportions
the assessed values to each of the counties. Id.; ORS 308.565.
As the department explains, unit valuation, as a
method of assessment, does not separate "real" from "per-
sonal" property, or "tangible" from "in tangible" property. N ei-
ther does unit valuation identify a separate value for "inven-
tory." The department thus urges that unit valuation does
not provide a means by which business inventory can be sep-
arately valued and exempted from the value of the unit. The
department, however, again ignores the fact that several
statutes exempt from taxation certain property that is sub-
ject to central assessment-and, thus, unit valuation. See,
e.g., ORS 308.665 (exempting railroad cars owned by private
car companies undergoing major work). Those statutes fore-
close the department's contention that unit valuation pre-
cludes, or is otherwise impossible to reconcile with, the valu-
ation and exemption of individual types of centrally assessed
property.
Furthermore, 	Oregon 	has 	adopted 	the 	Western
States 	Association 	of 	Tax 	Administrators, 	Appraisal
Handbook: Valuation of Utility & Railroad Property (1989)
proposed that centrally assessed companies should be exempt from the "net busi-
ness tax." See Minutes, Interim Committee on Taxation, Aug 8, 1964, 6 (explaining
that, because there is no effective way of segregating inventory to give relief from
the tax, centrally assessed companies gain no benefit and pay no additional tax).
His comments were made to a 1964 interim committee in support of a potential tax
that was ultimately rejected by the legislature. Or Laws 1965, ch 604, §§ 8, 8a.
Moreover, as explained post, 34 7 Or at 561-63, Heider's reasoning was incorrect-
that is, he based his conclusion on the incorrect premise that there was no effective
way of segregating assessed inventory from the unit value. We therefore decline to
place any weight on Heider's comments in determining the legislature's ultimate
intent.

562 	Northwest Natural Gas Co. v. Dept. of Rev.
(WSATA Handbook) as the official valuation guide for cen-
trally assessed property in this state. OAR 150-308.205-(B).
Included in the WSATA Handbook is a prescribed uniform
procedure for separating tax exempt property from the unit
valuation. The WSATA Handbook explains that, although
generally 	"no 	attempt 	is 	made 	to 	assign 	values 	in 	a
unit appraisal to individual items of property," such value
must be assigned if "it is a legal requirement." WSATA
Handbook at 8. The WSATA Handbook thus aims to provide
"consistent application of allocation techniques for removing
nontaxable property from the unit valuation." Id. at 10. The
WSATA Handbook further specifies that, under any of sev-
eral methods of unit valuation, the appraiser must specifi-
cally identify and account for exempt property to be excluded
from the valuation. See, e.g., id. at 22-23, 38 (appraisers
engaged in "cost method" are required to exclude property
exempt from property taxation; common exclusions include
"inventory"); id. at 70, 76 (adjustments to "income approach"
are required to account for assets not taxable); id. at 98 (value
contribution of nontaxable assets must be removed from
the stock and debt indicator under the "stock and debt
approach").
The department has also acknowledged, via prom-
ulgation of its own administrative rule, that assessors are
required to value, and remove from the unit, exempt prop-
erty. The department mandates that the unit value for gas
distribution companies be adjusted to exclude "nontaxable"
property included in the unit. OAR 150-308.205-(B)(2)(b).
That rule forecloses the department's contention that identi-
fying exempt property and removing it from the unit valua-
tion is impossible or unreasonable.
Finally, we observe that, in this case, the depart-
ment had before it the information necessary to exempt the
disputed property. Specifically, taxpayer's annual report
expressly identified the property at issue in such a way that
the assessed value of that property could be removed from
the unit valuation of taxpayer's property. See also ORS
308.525(9) (annual statement must contain a detailed state-
ment of personal property located in Oregon owned by the
centrally 	assessed 	company); 	WSATA Handbook 	at 	13
("[m]andatory reporting usually requires a detailed listing of

Cite as 347 Or 536 (2010) 	563
all items of taxable property with descriptions and original
cost"). Thus, the practicality argument that the department
makes finds no support in the statutory scheme or in the rec-
ord in this case.
Accordingly, the method of valuation prescribed by
the legislature for centrally assessed property does not con-
vince us that it is impossible to value and exempt inventory
subject to central assessment. We therefore decline to read
into ORS 307.400 a limitation-i.e., an exemption for locally
assessed property only-that the statute does not contain
and that the broader statutory scheme does not compel.
IV. 	CONCLUSION
In sum, an analysis of the text and context of the
business inventory exemption statute, ORS 307.400, as well
as its legislative history, leads us to conclude that the exemp-
tion is not limited to locally assessed taxpayers. We therefore
hold that the business inventory exemption prescribed in
ORS 307.400 applies generally to exempt the "inventory" of
all "taxpayers," including taxpayers whose property is sub-
ject to central assessment pursuant to ORS 308.505 to
308.665.17 Accordingly, in determining whether centrally
assessed property qualifies as "inventory," we look not to the
definition of "tangible personal property" in ORS 307.020;
rather, we must determine: (1) whether the property is "tan-
gible personal property" under the plain and ordinary mean-
ing of that term; and (2) whether the property meets the use
requirement under ORS 307.400, viz., whether the property
is or will be stock in trade held for sale in the ordinary course
of business. It follows that, because the parties stipulated
that taxpayer's gas reserves and retail appliances are "tan-
gible personal property," and the parties do not otherwise
dispute that the property meets the "use" requirement under
ORS 307.400, taxpayer is entitled to a property tax exemp-
tion under ORS 307.400 for the subject property.
The judgment of the Tax Court is affirmed.
17 Because we hold that the business inventory exemption applies to the
"inventory" of centrally assessed taxpayers, we do not reach taxpayer's alternative
argument, viz., that its retail appliances were not subject to central assessment
and, thus, exempt nonetheless.