Intel to get local tax breaks worth about $2 billion on equipment, tools in Oregon expansion

Local officials have approved a tax break for Intel Corp. that could be worth about $2 billion during its expansion in Washington County west of Portland.

Intel is the state's largest private employer, with 17,500 employees, and in recent years, the chip-making giant has been building manufacturing capacity at an accelerated rate, The Oregonian ( ) reports.

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The tax breaks are under a 1993 state law designed to attract high-tech manufacturers, whose tools and equipment depreciate rapidly.

Intel has previously negotiated four agreements with local officials under the law and said it's now bumping up against the limits in the current one.

Some residents and tax watchdogs objected to the tax breaks. But the tax cuts had support from local and state leaders.

"The company will be responsible for making Oregon the dominant high-tech manufacturing center in the world," said Vince Porter, Gov. John Kitzhaber's policy adviser on jobs and the economy.

The Hillsboro City Council and the county commissioners met jointly Tuesday to approve the deal.

The votes were unanimous after County Chairman Andy Duyck recused himself because his company makes parts that Intel uses to test products, and Intel donated $5,000 to his re-election campaign.

Under the deal, up to $100 billion in tools and equipment will be exempted from property taxes over 30 years. Intel will pay taxes on the first $100 million.

The company will also make "full freight" payments in fees rather than property tax payments on its land and buildings. The fees give local officials flexibility in using the revenue.

It will also pay $2.7 million annually and a $2 million "community service fee," and make a $100,000 charitable contribution in each of the next six years.

The company is headquartered in California, but many of its factories, are in Oregon.

Last year, the state gave Intel a 30-year assurance that it could continue operating under the state's favorable corporate tax structure. That was similar to a deal struck with Nike, whose Beaverton campus is a few miles east of Intel.


Information from: The Oregonian,