Rural lawmakers hope to secure Nike-style deal for small businesses

Tax certainty would help rural companies, legislators say

By Lauren Dake / The Bulletin / @LaurenDake

Published Dec 23, 2013 at 12:01AM

SALEM — At the end of this month, a legislative package crafted to benefit Nike, guaranteeing the retail giant some tax certainty, is set to expire — no other business can apply for the same deal.

But there is growing momentum to ensure smaller, more rural businesses get a chance to strike a similar bargain.

Several lawmakers are grappling with how to take the 30-year tax agreement created for Nike, which will also likely benefit Intel, and translate it into something that could help smaller businesses throughout the state.

Rep. John Huffman, R-The Dalles, said it’s an issue that “won’t go unanswered in the 2015 session.”

Last year, the governor called lawmakers back to the Capitol for a one-day special session to approve a deal assuring Nike its corporate income tax structure won’t change for 30 years.

The bargain doesn’t give the company a tax break. But it does ensure the corporate tax structure, known as the single sales factor, won’t change.

The single sales tax factor impacts companies that have large amounts of sales outside of the state. As long as Nike creates 500 new jobs and invests $150 million in the state, its corporate taxes will continue to be based only on sales that happen within Oregon for the next three decades.

Roger Lee, executive director of Economic Development for Central Oregon, said the deal illustrates the power of certainty. It’s a constantly changing tax landscape, Lee said.

“And hey, if these larger companies are asking for some certainty, it might make sense small business would like certainty as well,” he said.

Rural lawmakers, in particular, have proposed legislation to get at this issue, and it was discussed during the one-day Nike special session.

Rep. Greg Smith, R-Heppner, said there were a lot of “hurt feelings among lawmakers” during that session.

“One or two districts in the state of Oregon got special consideration while other parts of the state that could have benefited from like legislation were excluded,” Smith said.

“You still have legislators saying, ‘why not us? why not our small businesses?’” Smith said.

House Republican Mike McLane, R-Powell Butte, said there seems to be more of a focus lately on helping the state’s rural economies recover.

“The plight of rural Oregon has not gone unnoticed … and while we have momentum and interest from those in the Portland businesses (groups) we need to strike,” McLane said.

It’s too early to say how a package aiding rural businesses would be crafted. But McLane noted that there are plenty of options.

“Instead of $150 million and 500 jobs, how about $5 million and 50 jobs,” McLane said. “We would scale it back but still create incentives for people to locate and expand.”

— Reporter: 541-554-1162, ldake@bendbulletin.com