Strategic Investment Program

The Strategic Investment Program (SIP) offers a 15-year property tax exemption on a portion of large capital investments. The program was created in the 1990s to induce large, capital-intensive facilities to locate and grow anywhere in Oregon.

What Projects Qualify

SIP projects must serve a "traded sector" industry. Oregon law defines "traded sector" as "member firms sell their goods or services into markets for which national or international competition exists."

The project's cost must exceed the taxable portion. But as a practical matter, the overall investment will need to be considerably bigger. In urban areas, the taxable portion of a project's market value is $100 million. In rural areas, it starts at $25 million.* Property in excess of this portion is exempt from taxes.

How Projects Get Approved

There are two options for an SIP project application:

  1. Ad hoc approval. The county holds a public hearing and negotiates an agreement between the business and county and city (if applicable).
  2. Strategic Investment Zone (SIZ). The zones are designed to provide a more streamlined local process. At any time, a county (and city) may submit a request through Business Oregon for the Business Oregon Commission to designate a Strategic Investment Zone.

Community Service Fee

Companies must also pay the respective county a community service fee as set by law. The fee is contained in the agreement with the business, which may include additional requirements on the business. The county must also sign a separate agreement with other local governments for distributing the fee.

Reporting Requirements

For any SIP project that is exempt in the prior tax year, the business must submit a report to Business Oregon detailing its employment and payroll. The report is used to evaluate the program's performance and provide estimates of state personal income tax revenue that may be shared with local governments.

Strategic Investment Zones (SIZ)
in Oregon

As of February 2016

Gresham SIZ #1

Designation: January 16, 2009
Sponsor(s): Multnomah County, City of Gresham

Features

Zone Map
500 acres prime manufacturing land inside Gresham


Clackamas Rural SIZ #1

Designation: September 24, 2010
Sponsor(s): Clackamas County; cities of Canby, Estacada, Happy Valley, Molalla and Sandy

Features

Rural Area*; Zone Map
1,791 square miles of rural area across county/cities


Clackamas Urban SIZ #2

Designation: September 24, 2010
Sponsor(s): Clackamas County; cities of Happy Valley, Lake Oswego and Milwaukie

Features

Zone Map
46 square miles of non-rural area across county/cities

*Under ORS 285C.600 "rural area" means an area located entirely outside of the urban growth boundary of a city with a population of 40,000 or more, at the time of application, or a Rural SIZ designated before October 5, 2015. In a rural area, the taxable portion of the investment and the community service fee are one fourth of what they are otherwise, and state application fees are lower for the partial exemption on property value under the Strategic Investment Program.