Doing Business in Oregon

Jill A. Miles, CEcDNational Recruitment Officer

Business Oregon

“Oregon has been able to give us an employee base that understands the silicon market. It just can’t be matched anywhere else in the world.”

- SolarWorld

A Prime West Coast Location

Oregon Population:3.7 million and growing

78% in Cities

Why Oregon Makes Sense: Quality and Cost

• Highly skilled workforce– Home to Intel’s largest manufacturing facility and many other semiconductor firms, Oregon has more than 50,000 tech workers

– Strong creative class• Low business costs

– Low business taxes, tax abatement and incentives

• Access to Market– Convenient gateway between Pacific Rim and U.S.

• Stable, affordable electricity supply – Stable electrical supply infrastructure and low industrial rates

• Clean technology leader– Largest manufacturer of solar cells in N. America

Skilled, Ready Workforce

• Oregon has an available food manufacturing workforce of around 68,000

• Oregon's attraction and retention of 18-34 year olds is 39% above U.S. average

• Industry-focused programs at community colleges, university system and union training centers

Oregon Agriculture

• Oregon has 1,200 licensed food processors in operation that created new jobs during the recent recession

• Food processing is expected to grow an additional 7% by 2018

• There are more than 234,000 jobs in Oregon tied to it’s agriculture economy

• 80% of Oregon’s farm production reaches customers who don’t live in Oregon

• Agriculture represents 12% of Oregon’s total economy

University Connectionsfor Innovation

Oregon university labs extend the R&D capacity of industry to advance innovation:•Oregon State University’s Food Innovation Center

– Food Product Development– Storage and Distribution Studies– Sensory and Consumer Testing– Local, National, International Market Access and Development

Low Costs Oregon’s Business Climate

• Low State and Local Business Taxes

• Low Power Costs• Low Worker Compensation Rates

• Low Cost of Land & Buildings

• Low Total Operating Costs

Oregon Has Low State and Local Business Taxes

• Oregon has the lowest effective business tax rate in the U.S. (Ernst & Young COST Study, 2010)

• Local property taxes, 1–2% of assessed value– Inventories and vehicles excluded

– Exemption Programs

• No sales tax, no inventory tax• Single Sales Factor tax structure

Oregon Business ClimateLowest Total Effective Business Tax

RateOregon is tied for The Lowest in the

U.S. at 3.5%

…Also Ranked #2 Most Competitive State for

New Investment

Ernst & Young / Center on State Taxation

Low Electrical Power CostAverage industrial rates

are about half that of California’s (U.S. Department of Energy, 2010)

Public Private

Sources Regional Supply• BPA (mostly hydro)• Own (very limited)

Portland General Electric (PGE),Pacificorp• Hydro, gas, coal, wind• Mostly owned

Price Approval

Local Board or City Government

Oregon Public Utility Commission

Service Area Profile

Some urbanMostly rural

Some ruralMostly urban

Price Estimate

$0.05 - $0.09 kWh $0.05 - $0.09 kWh

Property Tax Exemption Programs

• Strategic Investment Program (SIP) for big facilities, 15-year partial exemption

• Enterprise Zone, 100% exempt:– Three years, as-of-right for eligible (non-retail) firms adding full-time jobs in zone

– With zone sponsor agreement, 1–2 extra years, subject to average employee compensation

• Most rural enterprise zones can also offer 7-15 year exemptions on all new facility property

Enterprise Zone (E-Zone)Property tax abatement program

• New, qualified plant & equipment 100% exempt from taxation

• Three years automatic with hiring requirements and potential urban zone additional conditions

• Extra one or two years (years 4 & 5) based on written agreement with local zone sponsor

• Future use for subsequent phases or projects

• Exemption periods apply to each year’s newly operational property over 3 years per authorization

• Future authorizations with 10% employment increases

Oregon Investment Advantage

• State income tax “holiday” – 10-year exemption/deduction of taxable income attributed to facility

• Inside eligible county—one of 16:– On any industrially zoned land, or– For any type of business in small city–UGB

• Requires:– Operations to be new/unique to that firm in Oregon (distinction for same company or between subsidiaries)

– Five or more full-time, year-round hires

– Not competing with existing businesses in relation to local resources or sales

April 13, 2023

Business Development Incentives

Oregon ClimateModerate & Productive

NW Marine Climate

Mediterranean

Climate

High Mountain Desert Climate

Access to Market

• Access to Key Markets– Easy distribution to California, the largest U.S. market, as well as export access to the Pacific Rim

– Full inter-modal access

• Portland International Airport voted best airport for business travel 4 of last 5 years

(Condé Nast, 2006-2008, 2010)

Port of PortlandLeading West Coast Hub

• More than 13 million passengers per year

•  200,000 tons of air cargo per year

•  22 carriers– 13 passenger carriers– 9 all-cargo carriers, including nonstop to Seoul

• About 430 passenger flights daily• International nonstop flights to Tokyo; Amsterdam; Toronto, ON; Calgary, AB; Vancouver, BC

• General aviation airports in cities of Hillsboro and Troutdale

Delta Non-Stop Service:Tokyo-Portland-Amsterdam

Advanced Intermodal Connectivity

Next Day

Second Day

Third Day

Portland Truck Delivery Schedule

Business Oregon

• Business Oregon serves as a one-stop gateway to project development:– coordination of public and private resources and regulations

– access to capital– tax incentives– export assistance– consulting services for lean and high-performance manufacturing

– minority- and women-owned business certification

– brownfields programs– site and infrastructure development

Questions?

Jill A. Miles, CEcDNational Recruitment Officer

503-551-0997Jill.a.miles@state.or.us

www.oregon4biz.com