The issue is jobs. If the Legislature will provide certainty on one particular tax issue, Nike, Inc., will commit to expanding in Oregon, spending at least $150 million and creating at least 500 jobs within five years.
It’s an easy choice; the Legislature should say yes.
Under current Oregon law covering the so-called “single-sales factor,” companies are taxed only on in-state sales. That matters to big companies like Nike or Intel, which sell most of their inventory outside Oregon. Nike wants a commitment that the state will continue that particular tax policy. The agreement would not, however, preclude other tax changes.
A proposal from Gov. John Kitzhaber would empower the governor to make an agreement with Nike or with any other company making a similar commitment in jobs and capital investment. The length of the tax policy commitment would be part of that agreement, determined by the governor.
Nike says it has outgrown its facilities, which include a large property near Beaverton, and that it has been courted by other states. The company employs about 8,000 people, and current average pay is reported to be more than $100,000 a year. The governor said the Nike expansion could provide a $2 billion boost and as many as 12,000 direct and indirect jobs over a seven-year period.
Kitzhaber has been working behind the scenes for more than a month and appears to have won the support of business and legislative leaders. He has called for a special session of the Legislatureon Friday to approve the plan.
Why the rush? If the governor waits for the 2013 Legislative session, any new tax law wouldn’t take effect until next July, according to The Oregonian. Nike is hoping for a swifter commitment.
If the governor succeeds, the state would not be walking away from any existing tax revenue. It would be providing one piece of tax certainty to a critical state employer, and ensuring further economic development and job creation. The idea is clearly a good one for the state.