From a news item that moved on The Associated Press wire yesterday morning:
“Intel Corp. on Tuesday revealed the scope of its latest infusion to keep its factories cutting-edge and push the chip industry’s pace: an investment of up to $8 billion to build a new factory in Oregon and upgrade four existing plants in Arizona and Oregon.
“In all, the projects will create up to 8,000 temporary construction jobs and up to 1,000 permanent positions in Oregon when that factory opens in 2013. …
“Intel has plants around the world, including Ireland and Israel, but three-quarters of its chip manufacturing is done in the U.S. That’s partly a function of strict U.S. export rules on the most sophisticated chip-making equipment. Those rules effectively limit the kinds of chips that Intel can make in certain countries, such as China.”
Two quick questions:
1. Don’t the folks at Intel know that Oregon is Tax Hell for business and they’re supposed to be FLEEING the state, not spending billions to expand here?
2. How come Intel can survive and thrive without moving its manufacturing to China and other Third World countries, and if the US can stop Intel from doing it, why can’t it stop other companies from doing it?
Okay, I guess that was three questions.
This article appears in Oct 21-27, 2010.
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Your question has an easy answer. Intel has been given large tax breaks that eliminate the job killing tax increases. If your as large as Intel you have the ability to get around taxes charged on the average business.
Tax breaks.
It is great they plan to stay in Oregon since Washington county needs the jobs, but they have (at the very least) some nice personal property tax breaks not available to most small business not so politically connected.
Like, for instance, The Source. Oh wait – I’m wrong. The SOURCE DOES get a tax break. Actually, it is technically a deferral since you occupy an historic structure.
How many people would like to pay $900 a year in property tax for their office building? At 2300 square feet, located on a prime corner in Bend, that’s a pretty good deal. My 20 year old house is 2344 square feet, not on such a prime corner, and I pay almost 5 times that much. Amazing that this negotiated tax break (for your building) occurred in 2006. Property tax for you went DOWN from over $2,000 to $537. Nice tax break if you can get it. And I can’t find a record for your personal property taxes. Does that mean you don’t pay any of those? If that’s an approved tax break, good for you for finding a politician with a sympathetic ear. Of course, that means I pay more to make up for it.
The bigger question is, if a tax break is good for the Source and good for intel, why isn’t it good for my little business? Oh yeah, I don’t have lots of employees (only 5) and I don’t have a public mouthpiece to come down on politicians. If property taxes are FAIR and based on value, why is it FAIR that the Source pays less property tax toward our schools and public services than I do? I assume you guys make up the difference in cash donations to the schools, police, fire and libraries, right?
I won’t argue that Oregon is tax hell, any more so than other places, but a property tax break on 8 BILLION dollars worth of equipment is a pretty substantial incentive to STAY in a place that already has a good employee base.
All this as I mail my check for my house and my little office’s personal property taxes to the county in the next couple of weeks. Nice.
Much of that is in the form of property tax breaks, which have no relation to Measures 66 and 67. Also, Intel employees who live in Oregon and make more than $125,000 will be affected by the personal income tax increase under M66.
You do have one thing correct Bruce, Oregon is “tax hell” for the average small business or individual.
JC, “All this as I mail my check for my house and my little office’s personal property taxes to the county in the next couple of weeks. Nice.”
Look man, if you don’t want to pay for the services made possible by your taxes, then find some place that either has a magic source of revenue to pay for those things, or some place that doesn’t bother, like a failed nation. I swear, people who gripe about paying taxes for things that make a place more liveable drive me crazy. Oregon needs people who are proud to pay the taxes needed to keep the place civilized. IMHO, of course.
Ben Sala: Compared with California, from where we moved two small businesses, Oregon is tax nirvana thankyouverymuchokaybyenow.
To follow up on the county’s hellish property tax burden, I ran the numbers on my two (personal and business property) tax bills. I’m giving percentages because I don’t know most of you guys.
SCHOOL DISTRICT #1: 27%
HIGH DESERT ESD: 0.6%
COCC: 3.6%
DESCHUTES COUNTY: 8%
COUNTY LIBRARY: 3.4%
COUNTRYWIDE LAW ENFORCEMENT: 5.7%
COUNTY EXTENSION/4H: 0.14%
911: 1%
911 LOCAL OPTION 2008: 1.44%
CITY OF BEND: 17%
BEND DOWNTOWN URBAN RENEWAL: 2.5%
BEND JUNIPER RIDGE URBAN RENEWAL: 0.5%
MURPHY CROSSING URBAN RENEWAL: 0.05%
BEND METRO PARKS & RECREATION: 9%
JAIL BOND: 0.9%
FAIRGROUNDS BOND: 1%
BEND LIBRARY: 0.6%
SCHOOL #1 BOND 1993: 0.7%
SCHOOL #1 BOND 1998: 3.1%
SCHOOL #1 BOND 2002: 3.7%
SCHOOL #1 BOND 2007: 3.9%
COCC BOND: 0.7%
I can’t speak for most, but to me, those charges seem reasonable and fair, and except for maybe the Juniper Ridge imbroglio (which is only 0.5% of the total), I see no hellishly useless line items there.
Oh – the tax rate for both personal and business property comes in at a smidge less than 1.6%.
Yep, it’s hell, I tell ya!
“the tax rate for both personal and business property comes in at a smidge less than 1.6%.”
I don’t understand what this means. Percentage of the total assessed value?
Yes, about 1.6% of the total assessed value.
Jack, where did the remaining 4.5% go?
Mr. Elliott,
I have no issue with payment of taxes. I’ve been here 40 years and always have. My problem and the root of my comment about mailing my taxes is that I fail to understand why, if we claim to have a “Fair” system based on the value of the property, I pay 5x more for a building (my house) that is clearly worth less than the well-sited Source building. I also wonder, if we are being fair, why my small business pays $2,700 in personal property tax on a bunch of crappy old desks and computers, and the Source pays none (that I could find on Dial) and Intel gets an 8 billion dollar break.
Please take your childish “Look man…”tone right on back with you to California. You have no idea whether or not I am proud to live here and pay tax. I can tell you that unlike some, I have a choice, and I live here by choice, serve on 3 non-profit boards, a couple of public-entity budget committees so I see where the money goes.
My comment was a COMPARISON. Read it again. Do you hang out looking to make yourself feel holier-than-thou? If so, count this one as an epic fail.
“I also wonder, if we are being fair, why my small business pays $2,700 in personal property tax on a bunch of crappy old desks and computers, and the Source pays none (that I could find on Dial)”
Did you look under Lay It Out Inc.? That’s the corporate entity that owns the Source.
Please Note: I can’t answer questions about the tax payments or other financial affair of the Source; I am not privy to such information. The only things I do for the Source now are this blog and some other occasional freelance writing.
JC, my apologies for a) my tone, and b) not reading your post well enough to clearly understand the basis of your gripe. It’s a fair one.
My dinky home business is paying $3,385 this year for old desks and crap equipment. As I said, I have no complaint about where the money is going, or even the tax rate. Seems reasonable to me, too.
I guess I tend to get a bit irritated at those who complain about taxes when those taxes are used to take are of reasonable expenses in the public’s — their community’s — best interests.
Your point is taken: some businesses, either due to good fortune or knowing who to hobnob with, get special breaks. Sometimes it works out in favor of the public good, sometimes not.
In the example of The Source, my personal prejudice has always leaned strongly in favor of supporting alternative newspapers. Towns that have only one paper, like the bought-and-paid-for fishwrap Bulletin, are more likely to become Pottervilles than remain as Bedford Fallses. So in my mind, the tax break that The Source gets works out in favor of the public good. The lower their overhead, the less beholden they are to advertisers, which allows for greater editorial freedom. So I don’t mind it.
But and anyway, thank you for the work you do for the non-profits–my wife works with some here in town–and please accept my apology for my unskillful and unfair response to your post.
Go Ducks.
Dang. I need to proof my stuff before posting. “Towns that have only one paper, like the bought-and-paid-for fishwrap Bulletin, are more likely …” makes it sound like the Bulletin is a town with only one paper.
I’m hopeless. Damn. I need to proof my stuff before posting. “Towns that have only one paper, like the bought-and-paid-for fishwrap Bulletin, are more likely …” makes it sound like the Bulletin is a town with only one paper.
I’m hopeless.
BTW — the “holier than thou” bit? Yeah, I do do that. I’m also a bit of a know-it-all and very very fussy about some things. These are quirks of my nature. Just call me on it, or ignore me.
Go Ducks anyway.
“Did you look under Lay It Out Inc.? That’s the corporate entity that owns the Source.”
Yes – I found the real property tax info under that name. Didn’t see any personal property tax info under either name. Of course, the county’s lookup system leaves something to be desired.
PS thanks Jack 🙂
Critic: Sorry, I didn’t mention the bottommost line item: “PENALTY” — I filed late this year. It’s 5%. Didn’t seem relevant. The rest is just rounding errors.
I have a different take on this article about Intel. I believe most of the posters here misunderstood the point Mr. Miller was making. If the new very opposed tax measures that recently passed were going to eliminate all job growth and drive big or new business out of this state, then why didn’t all of this mayhem affect Intel ?
Mr. McFaddin,
The measures don’t directly impact a profitable C-Corporation if they use what is know as apportionment. This allows you to pay tax only on Oregon portion (or whatever state) of income. They use transfer pricing, too complex for ODR folks to comprehend, and show probably a small profit. Measure 67 imposed a new tax on NON-PROFITABLE businesses, and an additional tax on profitable businesses. Interstate, and indeed international businesses with a decent in-house tax department will look and determine how best to allocate profitability.
The mayhem for most businesses operating as C-Corporations is probably overstated. The problem is that closely held businesses (operating as S-Corps or Partnerships (often, LLC’s) have potentially mobile owners who might choose to move the business out of Oregon. The usual answer was to move to Washington. They have a ballot measure now I think #1098 – which if passed will add an income tax to high-income folks up there. I’m not sure what that will do, but if passed, it will make the decision to pick up and move to Vancouver or Camas not such a slam dunk.