Link to Owner Dr. Robert B. Pamplin Jr.



Intel paid $135 million in property taxes, more than twice what was waived

Even with Intel’s well-documented contributions to the regional economy, the state and local tax breaks the company receives to do business in Washington County remain controversial. But a recent economic analysis commissioned by Intel suggests the company pays and generates more local property taxes and state income taxes than it has been excused from paying.

Intel invested more than $25 billion in the county after the Oregon Legislature passed economic development programs that reduced the company’s potential taxes in the 1990s. The expansions made Intel the largest employer in the state, with most of its 17,000-plus employees living in Washington County.

Critics continue to complain that Intel should pay more in state income taxes and local property taxes, however. Recently, the issue of the tax breaks was brought up as part of the reasoning behind calls for the Oregon Department of Environmental Quality to require Intel to reduce its emissions.

“If our government allows these corporations to thumb their noses at emission regulations and laws, it too is thumbing its nose at citizens, who are unrepresented by elected officials and who are forced to pay more taxes to carry the tax burden that corporations have avoided,” wrote Cindy Straughan of Forest Grove when she signed an online petition to Gov. John Kitzhaber and members of the Oregon Legislature.

Intel supporters point out the company would not have made such a large investment in Washington County without the tax incentives.

“It is no accident that Washington County has become Intel’s headquarters for research and product development,” said Washington County Chairman Andy Duyck. “The property tax abatement agreements the county and the city of Hillsboro made with Intel — in partnership with the state of Oregon — set the stage years ago for much-needed jobs and the ripple effect these jobs created.”

An analysis prepared by the ECONorthwest consulting firm found Intel and its employees paid and supported $135 million in property taxes in 2012. The analysis also found Intel employees paid and supported more than $192 million in state income taxes that year.

The $135 million in property taxes is more than twice the $62.2 million that was waived under the state’s Strategic Investment Program in 2012. It includes $21 million paid by Intel and $114 million paid or supported by the company’s employees with their spending. Most of the property taxes — $106 million — are generated in Washington County.

“The ECONorthwest study confirms that no other economic development tool has had nearly as much positive impact for our local community — and for Oregon — as the Strategic Investment Program,” said Duyck.

Determining the income tax trade-off is harder, however. Intel does not disclose how much it pays at each location around the world, although the company says its effective global income tax rates was 26 percent in 2012. Intel probably paid more in Oregon income taxes in the 1990s, before the Oregon Legislature decided to tax companies that do business in multiple states only on income generated in Oregon.

Critics believe that may have saved Intel $50 million or more in state income taxes in 2012, but that is still less than the $192 million in state income taxes paid and supported by the company’s employees.

Despite the controversy, more metropolitan area residents support than oppose providing public subsidies and tax breaks to attract new jobs and industries.

According to the 2013 “Oregon value and belief survey,” 41 percent of respondents either strongly or slightly supported them, while only 23 percent opposed them. The remaining 34 percent were either neutral or did not have an opinion.

The annual survey was conducted by Portland-based DHM Research on behalf of Oregon Health and Science University, Oregon State University, Oregon Public Broadcasting and the Oregon Community Foundation.

Gov. Kitzhaber recently agreed to guarantee Intel will only be taxed on its in-state earnings for the next 30 years. He signed a contract to that effect with company officials in early December. Kitzhaber’s tax guarantee was based on a law passed at Nike’s request during a special session of the Oregon Legislature a year earlier. In exchange, Intel promised to invest at least an additional $500 million and create 500 or more new jobs in the state within five years.

Former Washington County Chairwoman Linda Peters is not convinced the jobs offset the subsidies, however.

“What else could have been done with the land, water and air capacity that Intel is using — and the money invested by local governments in tax incentives, infrastructure improvements, etc. — that might have proven more sustainable and beneficial to the health and well-being of Washington County communities?” asks Peters, chairwoman of the Washington County Citizens Action Network.

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