Companies located inside enterprise zones can receive exemptions on property taxes for new construction or equipment, as long as the investment causes the company to add jobs or increase productivity.

Companies located inside enterprise zones can receive exemptions on property taxes for new construction or equipment, as long as the investment causes the company to add jobs or increase productivity.

East Oregonian

Some of Eastern Oregon’s biggest businesses get a tax break only they can access, but it comes with a catch.

The enterprise zone, an Oregon program that provides multi-year property tax exemptions on new investments, has been utilized often by Pendleton and Hermiston over the past decade. Companies in certain industries located inside one of the zones can receive a three- to five-year exemption on property taxes for new construction or equipment, as long as the investment causes the company to add jobs or increase productivity.

The Exemptions

From the beginning of Hermiston’s enterprise zone in 2005 until the end of 2017, the city gave enterprise zone tax exemptions to $85 million in capital investment. Those breaks exempted the companies — Shearer’s Foods, DuPont Pioneer, Pioneer Hi-Bred and Eastern Oregon Telecom — from paying any property taxes on the new construction or equipment for three to five years.

In early January, the city gave its first tax break longer than five years — known as a longterm rural enterprise agreement — to potato processor Lamb Weston. The company will not have to pay property taxes for 15 years on a $225 million project expanding its Hermiston plant. But in exchange for the longer tax break, the company has agreed to a $1 million per year payment to be split between the city of Hermiston and Umatilla County. Assistant city manager Mark Morgan said that $15 million spread over 15 years will equal about 42 percent of what Lamb Weston would have paid in property taxes over that same time period.

Read the full story at the East Oregonian.