Tax Incentives

Oregon offers globally competitive tax incentives to help encourage businesses to locate in Oregon, and existing Oregon businesses to grow and prosper. A 2008 report by Ernst and Young recently ranked Oregon as having the second-lowest effective business tax rate in the United States.

Standard Enterprise Zones—In exchange for locating or expanding into an enterprise zone, eligible (generally non-retail) businesses receive exemption from property taxes on new plant and equipment for at least three years (but up to five years) in the standard program.

Long-term Enterprise Zones—Available in most rural enterprise zones, the long-term zone program extends property tax abatement to 15 years, rather than the standard three to five years. Any type of business activity is eligible, but these incentives depend on local approval and minimum levels for investment size, job creation and employee compensation.

Electronic Commerce Zones—Several of Oregon's fifty-some enterprise zones have received special status to further encourage electronic commerce, or "e-commerce," investments. The credit equals 25 percent of that tax year's investment cost in capital assets for operations related to electronic commerce and located in the designated area.

The Oregon Investment Advantage—This income tax exemption program helps businesses start or locate in most Oregon counties with a 10-year waiver on all income/excise taxes related to those operations, potentially avoiding state business tax liability for that period.

Strategic Investment Program—The Strategic Investment Program exempts a portion of large capital investments from property taxes. The program is available statewide for projects developed by “traded-sector” businesses, most often used for manufacturing firms.

Business Energy Tax Credit—The Oregon Department of Energy offers the Business Energy Tax Credit to those who invest in energy conservation, recycling, renewable energy-related manufacturing and less-polluting transportation fuels.