Business news :Nike Inc. Secures Tax Code Assurances from Oregon

During the special session of the Oregon Legislature on Dec. 14, Oregon legislators voted to provide Nike's assurances that the state's tax code will not change. Nike had informed Oregon Gov. John
Kitzha ber prior to the session that other states have been aggressively courting the company.

Nike said it plans to expand its operations in Oregon and hire hundreds of workers, but first wanted the assurances.

The Legislature is due to meet in its regular annual session beginning Jan. 14, but Kitzhaber believed Nike needed certainty sooner.
“Getting Oregonians back to work is my top priority,” Kitzhaber emphasized at a news conference.

Kitzhaber has stated that Nike’s expansion would generate $2 billion in invest- ment per year and could create as many as 12,000 jobs by 2020. He added that construction would generate about 2,900 jobs and $440 million.

Nike is the second-biggest company in Oregon by number of employees and revenue. Nike’s employment in Oregon has grown 60 percent since 2007 with an average annual compensation of over $100,000, about double state and regional averages. Before expanding, Nike wanted an assurance that its state tax burden will not increase.

The proposed legislation allowed the governor and the director of the Depart- ment of Revenue to sign a contract with any company planning to satisfy cer- tain stipulations. Those stipulations include a $150 million, five-year invest- ment with a net employment of 500 full-time jobs. The contract would lock in the state’s corporate tax rates over a set period of time and guarantee that a company’s corporate tax liability is calculated by Oregon’s current single-sales factor, which does not count employees or property when determining the ex- tent by which a multi-state corporation is subject to Oregon tax.

According to OregonLive.com, three main provisions of the bill emerged as key bargaining points in the days leading up to the special session: the duration of the agreement, who can benefit from the legislation, and job details. In terms of the agreement’s duration, the draft bill as written allowed for a contract lasting from 5 to 40 years. Some lawmakers wanted to reduce the upper limit of any contract.

With regards to who benefits from the bill, Republicans wished to increase the number of businesses able to participate in the pro- gram. Finally, in terms of jobs, Democrats wanted additional clarity on the kinds of jobs that would be created by a participating company.

Ultimately, the legislation passed Friday would authorize the governor to give Nike a promise to maintain substantial tax benefits for up to 30 years. Accord- ing to Kitzhaber’s spokesman, Tim Raphael, the governor will sign the bill as soon as next week.

“They’re prepared to commit to a very serious long-term investment if we can give them certainty on the investment climate during that time,” said Kitz- haber prior to the special session, according to the Oregonian.

Nike built its current headquarters in Beaverton in 1990.

( SportsOneSource Media )

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