Greater Portland is a Great Place for Business
Aerodynamics testing at the Daimler Trucks North America Wind Tunnel, Portland
Photo courtesy Daimler Trucks North America LLC
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Nearby Southwest Washington has no corporate income tax, no corporate alternative minimum tax, no personal income tax, and no inventory tax. Due to these tax structures, Washington is the 11th best state and Oregon is the 12th best state for business tax climate in the country by the Tax Foundation.
According to the Ernst & Young LLP COST Study for Fiscal Year 2013, Oregon has the lowest total effective business tax rate imposed on business activity by state and local governments.
Single Sales Factor
Oregon businesses are taxed on a portion of their total income derived from sales within the state of Oregon. This corporate income tax is considered “Single Sales Factor” tax, as it considers only Oregon sales in determining corporate income taxes owed to the state. Other states often include additional assets and payroll, making them “multi-factor” taxes.
This aspect of the corporate income tax has a tremendous impact for multi-state companies based in Oregon. If a company is located in Oregon but sells products throughout the United States or internationally, that company pays only Oregon corporate income tax based on the amount of income coming from sales within state lines.
Greater Portland currently affords a long-term sustainable business environment with its existing tax structure. However, it is also recognized that incentives are often a factor in off-setting upfront cost when choosing a location to expand or relocate. The following programs are available in certain areas in the region for qualifying companies:
Enterprise Zone (E-Zone): This tax incentive provides a 100% property tax abatement for 5 years on all new qualified investment within the designated Enterprise Zones. Incentive is based on qualified investment and job retention and/or creation. This incentive requires the completion of an application. Approval will occur within 30 days for all properties in the designated Enterprise Zones.
Business Expansion Program (BEP): Per ORS 285B.600, this program provides forgivable loans to certified employers to allow for expanded operations and increased hiring. Criteria for certified employers include the following:
- Has at least 150 employees;
- Plans to hire at least 50 new full-time employees in this state whose compensation will average at least 150% of the county or state average in annual per-employee compensation, whichever is less;
- Operates in an industry in the traded sector, as that term means “industries in which member firms sell their goods or services into markets for which national or international competition exists.”
Strategic Reserve Fund (SRF): Per ORS 285B.266, the Strategic Reserve Fund implements statewide strategies for economic development that place particular emphasis on investments that assist communities, [traded-sector] businesses or industries in cost-effective projects. The fund is used to assist businesses with significant long-term, regional, or statewide economic impacts to provide interim financing mechanisms to augment existing private sector programs.
This is a discretionary incentive subject to application and approval by Business Oregon, the State economic development department.
On-the-Job Training (OJT): On-the-job training contracts are a great way to cut costs and train new employees to meet company standards. The Oregon On-the-Job Training program allows the state to reimburse a business 50% of the cost of wages up to $4,000 for multiple employees, while the business trains the new hires to meet specific company needs. From engineers, to software specialists, to administrative staff and production workers, on-the-job training can be used to support a variety of recruitment needs for almost any position. This program is subject to application and approval through workforce agencies.
Solid Foundation for Growth: The Greater Portland region was recently identified as one of the top 10 U.S. markets poised to serve tech company needs. The metrics used to inform this ranking include job and wage growth, intellectual capital, innovation, and the concentration of favorable amenities such as walkability and access to transit.
West Coast Bargain
Globally connected, with the most modest cost of doing business on the West Coast, the greater Portland region enjoys a deep pool of talent that continues to grow, due in part to its high quality of place and comparatively low cost of living. The median home sale price is $305,000 (September 2015), and the average monthly rent for a 1-bedroom apartment is $1,323 (October 2015).
Unique Regional Advantages
With exceptional access to the outdoors, emerging creative industries, and a productive workforce, the region has defined itself as a world-class destination for business and life. Because of this culture, once employees come to Greater Portland, they never want to leave.
Just a few of the unique regional advantages include:
- Only year-round skiing in the United States at Mt. Hood, which is only an hour away.
- Over 350 miles of largely undeveloped coastline, with guaranteed full public access, as close as an hour’s drive.
- A food lover’s paradise: More than 50 farmers markets and organic restaurants, 112 wineries, and 360 coffee shops. Also, numerous startups in the form of “food cart pods” throughout the city allow entrepreneurs to launch a restaurant at low cost.
- Over 280 mountain bike trails in Oregon and Washington.
- A “Beervana”: With 53 breweries and counting, Portland has more than any other city on earth.