Cook v. Yamhill County Assessor

DECISION TC-MD 240023R 1
IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
BENJAMIN COOK and BREATHE EASY
SPEAKTEASY
and MATTHEW HUEGLI,
)
)
)
)
)
)
)
)
)
)
Plaintiffs, TC-MD 240023R
v.
YAMHILL COUNTY ASSESSOR,
DECISION	Defendant.
Plaintiffs appeal Defendant’s written Denial of Application for Property Tax Exemption
dated October 20, 2023, for the 2023-24 tax year.1 Plaintiffs’ application was made in
connection with real property located at 9670 SW Bayou Drive in McMinnville and associated
with tax account 174938 (subject property).
A trial was held remotely on November 25, 2024. Benjamin Cook (Cook) appeared on
behalf of Plaintiffs. Cook, Matthew Huegli (Huegli), Bobbie Schrag (Schrag), and Heather
Harris (Harris) testified on behalf of Plaintiffs. Derrick Wharf (Wharf), Assessor for Yamhill
County, appeared on behalf of Defendant. Roxane Henderson (Henderson) testified on behalf of
Defendant. Plaintiffs’ Exhibits 1-181 and Defendant’s Exhibits A-J were received into evidence
without objection.
/ / /
/ / /
1 Plaintiffs’ Complaint states that the tax year appealed is “2023” and also requests a “[f]ull refund for 2022
2023.” (Compl at 1.) Defendant’s denial letter for the 2022-23 tax year was mailed on April 19, 2022. Oregon
Revised Statutes (ORS) 305.280 (2021) requires appeals to be filed within 90 days of the exemption denial. The
complaint was filed on January 18, 2024, which is 639 days after the denial. Plaintiffs’ appeal for that year is
untimely. Consequently, the court will only analyze the 2023-24 tax year.

DECISION TC-MD 240023R 2
I. STATEMENT OF FACTS
A. Breathe Easy SpeakTeasy Organization
Breathe Easy SpeakTeasy (Breathe Easy) is a nonprofit organization located in
McMinnville. (Ptfs’ Ex 51.) The organization operates at two locations. (Ptfs’ Ex 149.) One is
private, and a membership is required to access that property. (Def’s Ex I at 10.) The second is
the subject property, which is referred to alternatively as Breathe Easy’s “Public Assembly
Sector” and “Happy Acres @ The Bayou.” (Id. at 1.) The single-story building located at the
subject property has several rooms. (Def’s Ex I at 3-4.) They include a “Storehouse,” a
conference room, a kitchen, a private office, an “Honesty Shop,” a kids’ room, a “Creativity
Space” with a kiln for pottery, a room labeled “Anointed Offerings,” an “Aphotic Teahouse,” a
fellowship hall, and bathrooms. (Id. at 4; Def’s Ex C at 8-9.) The room labeled “Honesty Shop”
is also referred to as the “Honesty Store” and provides “Honesty Shop Partner Members” with “a
designated area to create [their] own display with [their] [b]io and a cash/check collection box.”
(Def’s Ex I at 5, 9.)
Cook is the organization’s president, and De Lisa Van Dyke (Van Dyke) is its secretary.
(Ptfs’ Ex 11.) At trial, Cook testified that the organization has evolved over time, with its first
major change being to convert from an LLC to a nonprofit. Breathe Easy was registered as a
domestic nonprofit corporation with the Oregon Secretary of State in June 2020. (Ptfs’ Ex 11,
48.) At that time, its bylaws stated that the organization’s purpose was to be, in part, “a members
and an appointment only wellness center that focuses primarily on Holistic Health techniques to
increase Educational Self-Healing practices for [its] clients.” (Ptfs’ Ex 13 (capitalization in
original).)
/ / /

DECISION TC-MD 240023R 3
In April 2023, Cook and Van Dyke revised the corporation’s bylaws to reflect new stated
purposes. (Ptfs’ Ex 53, 59.) As relevant to the subject property, those purposes include
“hold[ing] space for fellowship through the means of churches, educational purposes, cultural,
charitable, philanthropic, youth centers, social halls, group camps, and recreational purposes.”
(Ptfs’ Ex 53.) Shortly thereafter, in June 2023, Cook filed articles of amendment to change the
nonprofit type from “public benefit with members” to “religious.” (Ptfs’ Ex 50, 80.)
At trial, Cook testified that other churches often allow community members to use their
church space when it is not being used for Sunday services. He questioned the practice of
limiting a church building’s use to just Sunday services. Cook testified that churches that use
their space to host classes and events are the ones he views as truly practicing community
togetherness. He stated that Plaintiffs are not just here for preaching but also for community
members to be a part of something.
B. Membership
Breathe Easy invites individuals and organizations to become members. (Ptfs’ Ex 181 at
2.) Cook testified at trial that “there’s a monthly donation due to be a member of [the Breathe
Easy] organization.” For $25/month, individuals can purchase membership at the
“CommuniTEA Tribe” level and receive access to Breathe Easy’s private location so they may
arrange various spa treatments for additional costs. For $35/month, individuals may purchase
“The Cause Membership,” which provides the same benefits as the CommuniTEA Tribe level,
plus access to weekly tea, yoga, and bible study hosted at the subject property for no additional
charge. The “Ultimate Partner Membership” is advertised as “[s]tarting at $150/month.” (Id.)
In his trial testimony, Cook explained that the Ultimate Partner Membership is for businesses
and nonprofits that need affordable places out of which to operate.

DECISION TC-MD 240023R 4
For example, Lillie’s Sweet Shop is a business that, for a time, “provide[d] a monthly
donation of $550” to use the kitchen at the subject property. (Ptfs’ Ex 39.) ShoeBox Taxes, Inc.
(ShoeBox Taxes) “provided a one-time donation of $2,450” and used the conference room to
teach tax classes. (Id.) Cook testified that he believed ShoeBox Taxes charged students for
those classes. Sources Networking is a nonprofit organization that meets weekly in the
conference room and “provide[s] a monthly donation of $200.” (Id.) Timber Hill Christian
Church (Timber Hill) also “provide[s] a monthly donation” of $615 per month and holds its
weekly church services, which are open to the public.2 (Id.) In his testimony, Cook described
how all these uses fit into Breathe Easy’s religious tenets by analogizing to other churches that
offer their otherwise-empty buildings to the community for use.
At trial, Cook testified that Breathe Easy offers its paying members three spiritual classes
per week at the subject property, one of which is a bible study. The other two weekly Breathe
Easy offerings are tea and yoga. (Ptfs’ Ex 181.) Individuals do not need to be Breathe Easy
members to attend yoga, but a $10 drop-in charge applies for non-members. (Def’s Ex I at 13.)
Shrag testified at trial that, for her personally, going to yoga four times per month is worth the
$35 monthly membership because she would have to pay for yoga classes anway if she went
somewhere else. Schrag did not state how much she would have to pay elsewhere.
In 2023, Breathe Easy received $18,205 from The Cause and The Ultimate Partner
memberships in connection with the subject property. (Def’s Ex H at 2.) Harris, a member of
Breathe Easy, testified at trial that she views membership fees as “the same as someone tithing to
a church.” Cook referred to those monthly payments as “dues” in his testimony, rejecting a
2 Plaintiffs submitted evidence of two different (but similar) monthly rates paid by Timber Hill. The other
is stated in part C of this section.

DECISION TC-MD 240023R 5
characterization of some of them as “rent” because Plaintiffs do not have a “lease structure” with
those organizations. He testified that most of the money received goes toward operational costs
at the subject property and that income attributable to the private location is necessary to keep
operations at the subject property afloat.
Breathe Easy’s financial data shows that $47,001 in income was attributable to the
subject property in 2023 and $39,600 was paid in rent, leaving roughly $7,400 to cover all other
operational costs arising out of that location. (Def’s Ex H at 2-3.)
C. Short-Term Use of the Subject Property
In addition to offering ongoing use of space and weekly programming for its members
who pay monthly, Plaintiffs make “Community Event Space” available at the subject property on
Fridays and Saturdays. (Ptfs’ Ex 181.)
During the tax year at issue, Plaintiffs contracted with individuals to use the subject
property for hosting baby showers, birthday parties, and graduation parties. (Ptfs’ Ex 110-15;
Def’s Ex F at 21-26.) Those contracts read “Facility Event Space Rental Agreement” at the top
and are for one-time use. (Id.) Details from the contracts offered as trial exhibits are
summarized as follows:
Cost for Rental Hours Rented Approx. Hourly Rate
$250 7 $36
$310 7 $44
$450 7 $64
$100 5 $20
$350 4 $88
$200 4.5 $44
(Id.) At trial, Schrag, who is a member of Breathe Easy’s Board of Directors, explained in her
testimony that Breathe Easy does not require a set dollar amount for short-term event rentals.

DECISION TC-MD 240023R 6
Instead, she testified, “the fee is set by the person renting the facility, [so] if they have less
money then they pay less money.”
Cook also testified about the short-term rentals. When asked what makes the subject
property different from a community center that rents out space, Cook provided two reasons.
First, he stated, “It’s different in the fact that everything is religious here.” Second, he testified
that rentals at the subject property are more charitable than traditional community center rentals
because Breathe Easy lets people determine the price they will pay, and “no one else does that.”
No party clearly established how much of the subject property’s overall use, measured by
time, income, or square footage, was attributable to short-term event space rentals during the tax
year at issue. Summarized non-membership income attributable to the subject property in 2023
was provided as follows:
Program Category Amount
Church & Bible Study $6,820
Classes $10,230
Donations & Fundraisers $6,540
Administration Office $5,206
Total Non-Membership Income: $28,796
(Def’s Ex H at 2.)
D. Long-Term Lease and Commercial Sublease Agreements
Huegli owns the subject property and began leasing it to Cook and Van Dyke under a
commercial lease agreement (lease) executed on October 21, 2021, for a term beginning October
29, 2021. (Ptfs’ Ex 21, 22, 147.) The lease defines Cook and Van Dyke as “Tenants” and
Huegli as “Landlord.” (Ptfs’ Ex 21, 36). While Breathe Easy’s name appears nowhere in the
lease, Huegli testified at trial that all parties verbally discussed Cook and Van Dyke’s intentions
to operate Breathe Easy as a nonprofit at the subject property. The lease itself states, “This

DECISION TC-MD 240023R 7
Agreement contains a complete expression of the agreement between the parties and there are no
promises, representations[,] or inducements except such as are herein provided.” (Ptfs’ Ex 35.)
On May 28, 2024, Huegli, Cook, Van Dyke, and Breathe Easy entered into a Lease Amending
Agreement (lease amendment). (Def’s Ex D at 17-19.) The lease amendment clarifies that
“Breathe Easy Speakteasy has always been the tenant * * * of 9670 SW Bayou Dr.” (Id. at 18.)
The original lease also states that the “Landlord is responsible for all real estate taxes and
assessments levied against” the subject property. (Ptfs’ Ex 23.) Base rent is set at $3,300 per
month and “a 5% rent increase per year will ensue.” (Ptfs’ Ex 22.) However, a “Rent increase
Forbearance” clause provides,
“In the following 5 years rent will not be increased by 5% as long as the 501(c) 3
exempt the property tax, by filing the location with the county, which negates the
Taxes. Tenant is responsible for getting Landlord the certificate of Proof for the
County.”
(Ptfs’ Ex 36.) Huegli testified at trial that, without a property tax exemption, he calculated he
would need to charge $3,500 or $3,600 per month. But, if a property tax exemption is obtained,
he could reduce the amount he would otherwise need to charge. He testified that he wants to
help Breathe Easy and that he would adjust the figures in the future, if needed, because his intent
is not to “gouge a nonprofit.” Rather, he just wants to be able to pay the taxes. Huegli testified
that the property tax, without an exemption, is approximately $4,500.
In May 2022, Cook, Van Dyke, and Huegli executed a contract titled “Commercial
Sublease” with Timber Hill (commercial sublease). (Def’s Ex E at 1-4.) Under the terms of the
commercial sublease, Timber Hill is to pay Cook and Van Dyke $575 per month in exchange for
use of the fellowship hall, kitchen, conference room, and bathrooms on Sundays from 9:00 a.m.
to 1:00 p.m. (Id. at 1.) A subsequent amendment confirms that the commercial sublease was in
effect through at least May 2024 and was agreed to remain in effect “until [Timber Hill]

DECISION TC-MD 240023R 8
decide[s] to find another location for their church.” (Id. at 6.) Timber Hill’s Sunday church
services are open to the public. (Ptfs’ Ex 39.) Henderson, an assessment specialist who oversees
Defendant’s tax exemption program, testified at trial that Timber Hill did not apply for a
property tax exemption for its use of the property.
E. Applications for Tax Exemption
In February 2023, Defendant received an Application for Real and Personal Property Tax
Exemption from Breathe Easy for the 2023-24 tax year. (Def’s Ex B at 1.) That application was
made on a form “[f]or property owned by specific institutions and organizations [Oregon
Revised Statutes (ORS) 307.162].” (Id. (second set of brackets in original).) Henderson
reviewed the application and then sent a letter to Plaintiffs stating, “[A]n exemption for the
[subject property] cannot be processed as it is an incorrect application.” (Id. at 5.) The letter
explains,
“[T]he application submitted (307.162) is intended for property that is owned by
an exempt entity. Our records show the property owner is Matthew Huegli. If
you are leasing space from this owner, you would need to complete application
307.112 which is for an exempt entity leasing space from a taxable owner. I have
included the correct form. Please complete and resubmit this application by April
1st for your request to be considered.”
(Id.) Cook testified at trial that the correct application form was included with Defendant’s
denial letter.
On their application, Plaintiffs described their own use of the subject property as, in part,
“provid[ing] space to other organizations for community events that further our mission.” (Id. at
2.) They listed “[o]ther organizations who [were] providing services to the public” at the subject
property, described in more detail in part A above. (Id.) In August 2023, Defendant received
another Application for Real and Personal Property Tax Exemption, this time on a form “[f]or
property owned by an exempt body and leased or subleased to another exempt body ORS

DECISION TC-MD 240023R 9
307.166.” (Def’s Ex B at 6.) One question on that form asks, “Is any portion of the property
leased to or used by others?” (Id.) Plaintiffs checked the box labeled “No.” (Id.) At trial,
Wharf asked Cook at why that was. Cook testified that he marked that box “because everyone is
a member of our organization, so it is, in fact, a whole of us.”
Henderson testified at trial that she reviewed the second application as well. While doing
so, she filled out a checklist. (Id. at 10.) She left the boxes labeled “Application is complete”
and “Application is signed & phone number listed” unchecked. (Id.) In a section for “Notes,”
Henderson stated that page one of the application was “incorrect (307.166) s/b 307.112[;]” page
two “for signature & phone #” was missing; and Plaintiffs “provided tax savings page from
correct app[.]” (Id.) The tax savings page states, “This form may be used as documentary proof
* * * that the tax savings resulting from an exemption under ORS 307.112 will inure solely to
the benefit of the institution * * * that has been granted the exemption.” (Id. at 7.)
Finally, Henderson noted that the “[m]ain focus is for activities for their members –
primary use is not for religion. Religious use is more incidental than primary.” (Id.) Henderson
sent another letter to Plaintiffs dated October 20, 2023, which is the decision that Plaintiffs
appeal. That letter states,
“The application does not meet the filing requirements of Oregon Revised Statute
307.140 (1): ‘All houses of public worship and other additional buildings and
property used solely for administration, education, literary, benevolent,
charitable, entertainment and recreational purposes by the religious organization.’
Breathe Easy Speakteasy offers space for the community to spiritually center, but
the primary offerings of your organization are not for the sole purpose of religion.
For this reason, your application for property tax exemption is denied.”
(Id. at 9.) At trial, Henderson testified that the subject property had “multiple alternative
uses” evidenced by the commercial sublease with Timber Hill and short-term rental
agreements for parties and events.

DECISION TC-MD 240023R 10
II. ANALYSIS
The issue presented is whether the subject property qualified for property tax exemption
for the 2023-24 tax year under ORS 307.140.3 Breathe Easy’s status as a nonprofit organization
is not at issue. Rather, the question is whether the actual use of the subject property satisfied the
legal requirements for property tax exemption.
A. Burden of Proof
As the parties seeking affirmative relief in this court, Plaintiffs bear the burden of proof.
ORS 305.427. Under ORS 307.140, property owned or being purchased by a religious
organization may be exempt from ad valorem property taxation if it is used exclusively for
religious worship, administration, education, or charitable purposes. The statute is to be
construed “strictly but reasonably.” Emanuel Lutheran Charity Bd. v. Dept. of Rev., 263 Or
287, 291, 502 P2d 251 (1972). The burden rests with the applicant to demonstrate that the
property is actually and primarily used for qualifying activities. Golden Writ of God v. Dept. of
Rev., 300 Or 479, 484, 713 P2d 605 (1986).
B. Qualifying Use Under ORS 307.140
ORS 307.140(1) exempts “[a]ll houses of public worship and other additional buildings
and property used solely for administration, education, literary, benevolent, charitable,
entertainment and recreational purposes by the religious organization.” Any part of a property
“used as a store or shop or for any purpose other than those stated” is taxable. Golden Writ of
God, 300 Or at 483.
The evidence as a whole demonstrates that the subject property was used for a variety of
secular and commercial purposes by individuals and organizations other than Breathe Easy.
3 The court’s references to the Oregon Revised Statues (ORS) are to the 2021 edition.

DECISION TC-MD 240023R 11
These include Shoebox Taxes, which charged students for tax classes; Lillie’s Sweet Shop,
which operated a commercial kitchen; Sources Networking, a secular networking group; and the
“Honesty Shop” which functioned as a retail space. Private rentals for birthdays, baby showers,
and graduations do not support or reflect a religious purpose. There uses were not incidental or
minimal. While Breathe Easy’s low or sliding scale for rental charges appears to be charitable,
the activities of the end users do not appear to support religious purposes.
Plaintiffs argue that these arrangements are not leases or rentals but rather expressions of
religious community through membership. However, the court is not bound by the labels used
by the parties. See Golden Writ of God, 300 Or at 484 (stating that the statute is satisfied by
actual use for qualifying activities, not a taxpayer’s subjective intent). The evidence shows that
individuals and organizations made regular payments in exchange for exclusive use of specific
rooms or facilities, often memorialized in written agreements. These arrangements are
functionally equivalent to commercial leases or rentals in substance, regardless of whether they
are labeled as “donations,” “memberships,” or “tithings.” For example, Shoebox Taxes paid
$2,450 to use the conference room for classes, and several individuals paid $100 to $450 for
baby showers, birthday parties, and graduation parties. These payments were not incidental or
symbolic; they were tied to specific, scheduled uses of the property. Accordingly, the court finds
that these uses are commercial or secular rentals and do not qualify as religious use under ORS
307.140.
Cook testified that all activities at the subject property including yoga, tea gatherings, and
community events are religious in nature because they promote spiritual connection and
community. The court does not question the sincerity or legitimacy of those beliefs. However,
the legal standard under ORS 307.140 requires that property be used exclusively or primarily for

DECISION TC-MD 240023R 12
religious worship or related qualifying purposes. Oregon courts “respect the decisions of
religious organizations as to the allocation of property to be used within a religious community,
but we are not bound by those decisions when objective facts demonstrate nonreligious use of
the property.” Golden Writ of God, 300 Or at 486. Here, the evidence shows that the property
was used for a wide range of activities, many of which appear secular or commercial in nature.
The court concludes that these uses, even if spiritually motivated, do not meet the statutory
requirement of exclusive or primary religious use by Breathe Easy.
Plaintiffs also charged monthly “dues” or “donations” for memberships tied to access to
yoga, tea gatherings, and bible study at the subject property. While these may be qualifying
uses, Plaintiffs did not provide evidence allocating time, space, or revenue between qualifying
and nonqualifying uses. Without such evidence, the court cannot determine whether religious
use was primary. Because Plaintiffs did not meet their evidentiary burden, the exemption must
be denied.
C. Lease Requirements Under ORS 307.112
Plaintiffs’ leases are an independent basis to deny an exemption. ORS 307.112 requires
that the exempt entity itself be the lessee and that the lease expressly provide that tax savings
shall inure solely to the benefit of the exempt entity. ORS 307.112(1)(b). Sufficient
documentary proof of this must be submitted at the time of application. OAR 150-307-0060(8).4
“Insufficient proof or failure to show the tax savings inures to the lessee * * * is grounds for
denial of the exemption.” OAR 150-307-0060(9).
Here, the original lease was signed by Cook and Van Dyke individually, not by Breathe
Easy—the putative exempt organization. A later amendment declaring that Breathe Ease “has
4 Oregon Administrative Rule (OAR)

DECISION TC-MD 240023R 13
always been the tenant” cannot retroactively correct the defect for the tax year at issue because
the law requires proof at the time of application.
Further, the lease terms do not expressly pass tax savings to Breathe Easy during the year
of exemption. At most, they prevented the landlord from raising rent if a tax exemption was
obtained. That is not the same as reducing rent in an amount equal to the tax savings or
otherwise ensuring that all savings flow to the exempt entity, as required. Huegli testified that,
because of the anticipated exemption, he charged $3,300 per month in the lease instead of $3,500
or $3,600. The court is not persuaded by this explanation. In 2023-24, the “discounted” rate of
$3,300 per month would have resulted in a savings of, at most, $300 per month to the lessees, or
$3,600 for the year. But Huegli testified that the property tax was roughly $4,500—meaning
$900 of the tax benefit would inure to Huegli. This failure to show that 100 percent of the tax
savings would inure to the lessees creates independent grounds for the court to deny Plaintiffs’
requested exemption.
Finally, Plaintiffs subleased space to Timber Hill Christian Church, which held weekly
Sunday services open to the public. While Timber Hill’s use is religious, ORS 307.112 requires
that each exempt occupant apply for an exemption independently. Plaintiffs did not demonstrate
that Timber Hill applied for an exemption. Therefore, Timber Hill’s use of the property does not
support exemption.
III. CONCLUSION
After careful consideration of the testimony, exhibits, and arguments presented, the court
concludes that Plaintiffs failed to prove that the property was used primarily for qualifying
activities by the religious organization within the meaning of ORS 307.140. They also failed to
demonstrate compliance with the lease requirements of ORS 307.112. Timber Hill’s separate

DECISION TC-MD 240023R 14
religious use does not rescue the claim, because Timber Hill did not apply independently for
exemption. Accordingly, the subject property does not qualify for a property tax exemption for
the 2023-24 tax year. Now, therefore,
IT IS THE DECISION OF THIS COURT that the Plaintiffs’ appeal is denied.
RICHARD D. DAVIS
MAGISTRATE
If you want to appeal this Decision, file a complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your complaint must be submitted within 60 days after the date of this Decision
or this Decision cannot be changed. TCR-MD 19 B.
This document was signed by Magistrate Richard D. Davis and entered on
September 26, 2025.