In exchange for receiving property tax exemption, participating firms are required to meet the program requirements set by state statute and the local sponsor. The Portland Development Commission is the local sponsor for the Portland E-Zone program.
The E-Zone program allows industrial firms that will be making a substantial new capital investment a waiver of 100% of the amount of real property taxes attributable to the new investment for a 5-year period after completion. Land or existing machinery or equipment is not tax exempt; therefore, there is no loss of current property tax levies to local taxing jurisdictions.
Generally speaking, the tax liability for a new capital investment is around 1.5% of the value of that investment. So, a $20 million investment would typically produce a tax liability of around $300,000 a year. Once the 5-year period is over, the improvements, along with the rest of the property, are fully taxed for the life of the improvements. After five years, the entire asset enters the tax rolls. So, the short-term waiver of local taxes results in a long term return to the local taxing jurisdictions.
Benefits to Portland
Over 50 companies have participated in the program, and approximately 25 projects are active. Since 1996, the City’s E-Zone programs have leveraged over one billion dollars in private investments and have created and retained over five thousand full-time, quality jobs.
Companies have invested anywhere from $500,000 to $86 million in facilities, equipment, and machinery as part of their E-Zone qualified investments. Most of these companies are traded-sector companies and could invest anywhere in the world. The E-Zone program is our City’s best economic development tool for attracting industrial sector businesses to establish and grow in Portland.
In addition to the private investment and job creation requirements, the public benefits derived from the E-Zone program include:
increased business opportunities for companies within the E-Zone through the program’s local procurement requirement;
enhance the tax base in the E-Zone to the benefit of all taxing jurisdictions; and
payment of 15 percent of the value of the tax abatement into the Business Development and Workforce Training. Fund to support local job training and financial assistance to small businesses in the area.
Added E-Zone Benefits to Companies: Electronic Commerce Overlay
Whereas the E-Zone provides a property tax exemption, the Electronic Commerce (“E-Commerce”) program provides a tax credit to offset State of Oregon personal or corporate income/excise tax liabilities for companies making a qualified E-Commerce investment. Qualifying companies can receive both E-Zone property tax abatements and E-Commerce tax credits simultaneously, as long as they comply with the regular E-Zone program requirements.
Once E-Commerce status has been approved, a company receives a state personal or corporate/excise income tax credit for 25% of its qualified investment up to $2M per year. The credit can be carried over five years, if they have sufficient tax liability to do so.
A qualified E-Commerce investment includes material resources related to E-Commerce, such as facilities, computers, equipment, networks, servers or software pertaining to the E-Commerce related business-to-business transactions of the firm.
Applying and Qualifying for the Portland E-Zone Program
Search for your property address to determine if it is within one of the shaded E-Zone areas.
Contact Andy Reed, Portland E-Zone Program Manager at 503-823-7053 or via e-mail to begin the application process, get estimates, and learn about compliance.
Please do not submit an application without initiating the intake process with the E-Zone Program Manager.
The Portland E-Zone is a five-year property tax abatement program. In order to qualify a firm must be making new investment in construction or equipment to leased or owned property within the E-Zone boundary and must be creating new or additional employment. Once an authorized company enters into the program it will receive full tax abatement on all qualified property for five years, consecutively, as long as Annual Compliance with program requirements is met.
The state of Oregon has approved PDC’s application to establish an Enterprise Zone (E-Zone) focused predominantly on geography east of Cesar Chavez Boulevard. PDC’s application was supported by numerous public and private entities, including Multnomah County, the Technology Association of Oregon, Greater Portland Inc., Columbia Corridor Association, the Port of Portland and the Portland City Council.
The E‐Zone is a state economic development program intended to leverage jobs and other community benefits from companies which make capital investments in their operations. In return, eligible companies receive a five-year property tax abatement on the value of their new investment. This is a proven tool to support business growth, job creation and community benefit. The City’s E-Zone program in North/Northeast Portland has had a considerable impact on our economy, leveraging more than $1 billion in private investments and creating/retaining more than 5,000 full-time, quality jobs since 1996.