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August 15, 2014

In Ore. Tax Case, Cultural Benefit Does Not Mean Charity

A Forbes contributor breaks downs an Oregon Tax Court's ruling last month that a nonprofit photography center does not qualify for a property-tax exemption.

The Newspace Center for Photography includes a gallery, classrooms, and darkroom and studio facilities. While the center is a registered 501(c)(3) organization, the Multnomah County assessor's office sought to collect property taxes, writes Peter J. Reilly, a certified public account who contributes to the Forbes website on tax issues.

The tax court ruled against the center last month, stating, "Photography education and public awareness are culturally enriching, but not necessarily charitable." The court noted that while Newspace offers some free services, it charges for classes and use of its photographic facilities. Mr. Reilly says the center might have had better luck had it claimed an exemption as an art museum—also allowable under Oregon law—rather than as a "charitable institution."