OR OP-1997-5 October 8, 1997

Are donations to Oregon's Executive Residence Account tax-deductible as charitable contributions?

Short answer: Yes. The 1997 opinion concluded that contributions to Oregon's Executive Residence Account, used to maintain the Governor's Residence, were deductible as charitable contributions for both federal and Oregon income tax purposes.

Disclaimer: This is an official Oregon Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Oregon attorney for advice on your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original AG opinion (PDF)

Plain-English summary

The Office of the Governor asked whether private donations to the state's Executive Residence Account, the fund used to acquire, maintain, and furnish the Governor's Residence, qualified for the charitable contribution deduction on federal and Oregon income tax returns.

Chief Counsel Donald Arnold concluded that they did. Under 26 USC § 170(c)(1), contributions to a state are deductible if made for "exclusively public purposes." IRS guidance (Rev. Rul. 57-511) treated a gift of property to be used as a Governor's Mansion as a gift for exclusively public purposes. Because Oregon tax law adopts the federal rules for what counts as taxable income, the same deduction flowed through to state returns.

Currency note

This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What was the Executive Residence Account?
A: A state account established under ORS 276.102. The Capitol Planning Commission was authorized to accept contributions for the acquisition, construction, remodeling, decoration, landscaping, furnishing, equipping, and maintenance of the state's executive residence (the Governor's Residence in Salem). Contributions had to be deposited in the account and used only for those purposes.

Q: Why did the deduction even apply, since the recipient was the State of Oregon rather than a charity?
A: 26 USC § 170(c)(1) extends the charitable deduction to gifts made to "a State, a possession of the United States, or any political subdivision … but only if the contribution or gift is made for exclusively public purposes." Donations to a state count, as long as the purpose is public.

Q: Is maintaining a Governor's Mansion really a "public purpose"?
A: The IRS said yes in Rev. Rul. 57-511 (1957). The residence is state property that supports official functions and state business. The opinion concluded the public-purpose character does not evaporate after the building is acquired, ongoing maintenance and furnishing remain part of the same public purpose.

Q: Did Oregon piggyback on the federal rule?
A: Yes. ORS 316.048 (and ORS 317.013 for corporations) generally adopted federal taxable-income rules. Because the contribution was deductible under federal law and Oregon tax computation begins with federal taxable income, the deduction carried over to the Oregon return.

Q: Could ordinary taxpayers rely on this opinion?
A: The opinion itself stated that it provided legal advice only to the Office of the Governor and the Capitol Planning Commission, and that other persons should consult their own tax advisors. AG opinions are persuasive but not binding on courts or the IRS.

Background and statutory framework

The Capitol Planning Commission is a permanent state agency with jurisdiction over certain state buildings and grounds (ORS 276.028, ORS 276.030, ORS 276.034). ORS 276.102 authorized it to accept contributions for the executive residence and to deposit them in the Executive Residence Account, restricted to the donor's specified purposes.

On the tax side, 26 USC § 170(c)(1) defined deductible charitable contributions to include gifts to states and political subdivisions made for "exclusively public purposes." IRS revenue rulings extended this to gifts that served broad public interests, including a 1957 ruling on Governor's Mansion property and a 1979 ruling on contributions to a state industrial commission.

The opinion read 26 USC § 170(c)(1) by its plain terms, relied on the two IRS revenue rulings as guidance on what counts as an "exclusively public purpose," and concluded that requirement was satisfied for the Executive Residence Account.

Citations and references

Statutes:
- 26 USC § 170(c)(1), charitable contributions to states for exclusively public purposes
- ORS 276.102, Executive Residence Account and acceptance of contributions
- ORS 276.028 to 276.034, Capitol Planning Commission jurisdiction
- ORS 316.048, ORS 317.013, Oregon's adoption of federal taxable income rules

Authorities:
- Rev. Rul. 57-511, 1957-2 CB 158, gift of Governor's Mansion property is for exclusively public purposes
- Rev. Rul. 79-323, 1979-2 CB 106, contributions to state industrial commission deductible

Source

Original opinion text

October 8, 1997
Bill Wyatt
Chief of Staff
Office of the Governor
State Capitol
Salem, OR 97310-0370
Re: Opinion Request OP-1997-5
Dear Mr. Wyatt:
You ask whether contributions to the Executive Residence Account are deductible for purposes of federal
and Oregon income tax. The answer is yes.
Discussion
1. Introduction
The Capitol Planning Commission, a permanent agency of the State of Oregon, is granted jurisdiction
over the development of certain state buildings and grounds. ORS 276.028, ORS 276.030 and ORS
276.034. ORS 276.102 authorizes the Capitol Planning Commission, on behalf of the State of Oregon, to
accept contributions "for the purpose of the acquisition, construction, remodeling, decoration,
landscaping, furnishing, equipping and maintenance of a state executive residence." ORS 276.102
requires that all such contributions of funds be deposited in the Executive Residence Account, to be used
"only for the purposes for which the moneys were given."
The Capitol Planning Commission formally adopted the Governor's Residence Policy on May 2, 1989.
The policy includes the following background information concerning the Governor's Residence:
The Governor's Residence, acquired in 1987, was purchased through the generosity of many
Oregon individuals and businesses as a home befitting the position of the Governor, the
Governor's family, and as a state asset to facilitate state business carried out more
effectively in a residential environment.
Although acquired and furnished by private donations, it is now owned by the State of
Oregon. The Department of General Services is responsible for its maintenance and upkeep.
Security is supplied by Oregon State Police. As a state property within Marion County, it
falls under the jurisdiction of the Capitol Planning Commission.
2. Tax Deductions for Contributions to a State
The Internal Revenue Code provides that contributions or gifts are deductible as charitable contributions
in determining federal taxable income if they are made to or for the use of:
A State, a possession of the United States, or any political subdivision of any of the
forgoing, or the United States or the District of Columbia, but only if the contribution or gift
is made for exclusively public purposes.
26 USC § 170(c)(1) (emphasis added).
Thus, contributions to a state are deductible if made for "exclusively public purposes." The term "public
purposes" is broadly defined. For example, a charitable contribution deduction was allowed for
contributions made to an industrial commission established by a state legislature to study the problems of
industrial life in a particular geographic area.
The commission, by promoting the general economic health of a region and by maintaining
and attracting industry, benefits the residents of the region either directly by increased
payments by industries for services and materials or indirectly through the general influx of
money into the area. Therefore, the commission serves an exclusively public purpose.
Rev. Rul. 79-323, 1979-2 CB 106.
In Rev. Rul. 57-511, 1957-2 CB 158, the Internal Revenue Service concluded that a gift to a state of
property to be used as a Governor's Mansion is considered to be a gift for an exclusively public purposes,
and thus qualifies for the charitable contribution deduction. It is reasonable to conclude that the
Governor's Residence can continue to serve its public purpose only if it is properly maintained. Thus, we
conclude that contributions to the Executive Residence Account, used for the "acquisition, construction,
remodeling, decoration, landscaping, furnishing, equipping and maintenance" of the Governor's
Residence, qualify for the charitable contribution deduction for purposes of federal income tax.
Oregon has generally adopted the provisions of the Internal Revenue Code that relate to the
determination of taxable income. See ORS 316.048 and 317.013. Because Oregon tax law adopts 26
USC § 170(c)(1), contributions to the Executive Residence Account qualify as charitable contribution
deductions for purposes of Oregon income taxation.
This opinion provides legal advice only to the Office of the Governor, and may be relied upon only by
the Office of the Governor and the Capitol Planning Commission. It is not intended as, and should not be
considered, advice to anyone other than state officers acting in their official capacity. All other persons
should consult with their own tax advisors regarding the deductibility of contributions to the Executive
Residence Account.
Sincerely,
Donald C. Arnold
Chief Counsel
General Counsel Division