The Oregon Supreme Court held that an administrative rule involving property tax valuation methods that was duly promulgated by the Department of Revenue pursuant to statute is controlling authority insofar as the rule does not conflict with constitutional or statutory law. Oregon Administrative Rule 150-308-0690 incorporates the Western States Association of Tax Administrators (WSATA) Handbook as the official guide for valuing utility property and other centrally assessed property in Oregon. A utility company challenged the valuation methods used by the Department under the WSATA Handbook to determine the real market value of its property for tax year 2020-21, arguing that the legal effect of the handbook was limited to internal Department proceedings. The Tax Court agreed and found that the rule was not entitled to deference and therefore not binding.
The Oregon Supreme Court reversed the Tax Court’s decision. The Court concluded that because the Department had statutory authority to promulgate the rule and did so in accordance with proper rulemaking procedures, the rule was a controlling source of law “unless, if applied in fact, it would compel a result contrary to the constitution or statute.” Because the Tax Court did not apply the rule in the first instance, the Supreme Court remanded the case to the Tax Court to perform the required analysis.