Standard Enterprise Zone Program
Enterprise zones are designed to encourage business investment through property tax relief, in specific areas of the state. In exchange for locating or expanding into an enterprise zone, eligible (generally non-retail) businesses receive total exemption from the property taxes normally assessed on new plant and equipment, for a specified amount of time, which varies between the different zone programs.
The following are the standard incentives available to eligible (generally non-retail) businesses locating in any enterprise zone, subject to authorization, timely filings and criteria:
- Construction-in-Process Enterprise Zone ExemptionFor up to two years before qualified property is placed in service, it can be exempt from local taxes. (For most authorized business this provides broader benefit than the regular exemption for commercial facilities under construction.)
- Three to five consecutive years of full relief from property taxes on qualified property, after it is in service.
- Depending on the zone, local incentives also may be available.
Before construction/installation activities begin on-site, the local zone manager must receive an application for authorization , which contains helpful information.
Eligible business includes manufacturers, processors, shippers and a variety of operations that serve other organizations, as well as call centers and headquarter-type facilities. Hotel/resort businesses also are eligible in some of the enterprise zones. Otherwise, retail, construction, financial and certain other defined activities are ineligible.
A new building/structure, structural modifications or additions, or newly installed machinery and equipment qualify for exemption, but not land, previously used property value and miscellaneous personal items.
Criteria for Qualifying Projects
For the basic, three-year enterprise zone exemption period, the business needs to:
- increase full-time, permanent employment of the firm inside the enterprise zone by the greater of one new job or 10% (or less with special-case local sponsor waivers);
- generally have no concurrent job losses outside the zone boundary inside Oregon;
- maintain minimum employment level during the exemption period;
- enter into a first-source agreement with local job training providers; and
- satisfy any additional local conditions, which vary for each zone.
Criteria for extended tax abatement (for a total of four or five years of exemption)
This includes the criteria for the three-year enterprise zone exemption as well as the following:
- Compensation of new workers must be at or above 150% of the county average wage.
- there must be local approval by written agreement with the local zone sponsor (city, port and county, or tribe); and
- the company must meet any additional requirements that the local zone sponsor may reasonably request.