Chapter § 14.2
| Jurisdiction | Oregon |
§ 14.2-1 Uniformity
Two separate constitutional provisions require uniformity of taxation. Article I, section 32, of the Oregon Constitution provides, in pertinent part, that "all taxation shall be uniform on the same class of subjects within the territorial limits of the authority levying the tax." Article IX, section 1, provides, in pertinent part, that "[a]ll taxes shall be levied and collected under general laws operating uniformly throughout the State." These two provisions are to be read together; if a tax does not violate Article I, section 32, then it also does not violate Article IX, section 1. Jarvill v. City of Eugene, 289 Or 157, 171 n 15, 613 P2d 1, cert den, 449 US 1013 (1980). There are, however, two differences between the two provisions. "[A]rticle I, section 32, applies to all taxation, state and local, while article IX, section 1, appears to apply only to those taxes that operate throughout the state." Jarvill, 289 Or at 171 n 15. And "the specific requirement of territorial uniformity is expressed [only] in article I, section 32." Jarvill, 289 Or at 171 n 15 (emphasis in original).
Although these provisions require the legislature to apply taxes uniformly within any particular class, the legislature has broad discretion to establish different classes for tax purposes and to treat different classes differently. See Wilson v. Department of Revenue, 302 Or 128, 132-33, 727 P2d 614 (1986) (no violation of Article I, section 32, when a regulation immediately taxed gain on the transfer of an investment from real property inside Oregon to real property outside Oregon, but permitted deferral of recognition of gain on such a transfer within Oregon).
Classifications for tax purposes will survive scrutiny under Article I, section 32, and under Article IX, section 1, if they have "a rational basis, and when subjected to judicial scrutiny they must be presumed to rest on that basis if there is any conceivable state of facts which would support it." Huckaba v. Johnson, 281 Or 23, 26, 573 P2d 305 (1978) (the statute allowing a deduction from taxable income of payments received under a federal pension, but denying the exclusion to military retirees under 65 years of age, was constitutional). Thus, notwithstanding the requirement of territorial uniformity in Article I, section 32, a city could establish subclasses of territory within its jurisdiction, and could treat the subclasses differently, as long as its classification was "based upon qualitative differences that distinguish the geographical area from other areas within" the city. Jarvill, 289 Or at 180. If a "subterritory is the only area so taxed, then the subterritory must not only be qualitatively different but must also be unique." Jarvill, 289 Or at 180. In Jarvill, 289 Or at 159-60, the challenges were to special ad valorem property taxes, gross retail sales and receipt taxes, and taxes on professional businesses within Eugene's Downtown Development District. The court held that those taxes did not violate Article I, section 32. Jarvill, 289 Or at 182.
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