What Was Not Inside Intel’s Economic Report

Chuck Sheketoff

Intel recently released a report on the “Economic Impacts of Intel’s Oregon Operations,” the third in an irregular series of reports it commissions from ECONorthwest. Sadly, the report omits an important fact about Intel — its state corporate income tax payments. That omission confirms that Intel no longer contributes in any significant way to pay for the public services from which it benefits.

Once upon a time, Intel was a responsible and model taxpayer and made sure the public knew that by reporting facts about its corporate income tax payments.

For instance, the 1998 Intel-ECONorthwest report pointed out, “In 1997, Intel paid $54 million in corporate income tax to the State of Oregon, the largest amount of any corporate taxpayer and 14% of all corporate income tax receipts in that year.” According to the report, Intel’s total output in Oregon was $3.5 billion (in 1997 dollars).

The 2003 Intel-ECONorthwest report said, “Intel’s Oregon corporate income taxes averaged $50.9 million per year over 1998 to 2001.” According to that report, Intel’s total output in Oregon in 2001 was $6.9 billion (in 2001 dollars).

Although the 2011 Intel-ECONorthwest report (PDF) boasts that Intel's overall output grew to $17.3 billion in 2009, the report is notably silent on the matter of how much the company paid in Oregon corporate income taxes that year.

How did it come to be that ECONorthwest no longer reports the corporate income taxes Intel paid to the state?

Intel successfully lobbied for a major tax loophole that slashed its corporate income tax bill in Oregon. Add to that a handful of income tax subsidies (e.g. credits and deductions) it enjoys and you understand why Intel escapes its responsibility for paying for the public services which benefit the corporation — a well-trained workforce, a good education system, and a court system open five days a week, for example.

Reiterating what Intel used to post on its website, this latest Intel-ECONorthwest report notes that tax policy was not a factor in why the company came here: “abundant water supplies, reasonably priced electricity, a strong education system and labor force, and convenient travel distance from the Silicon Valley.” It wasn’t tax loopholes and subsidies that brought Intel to Oregon.

Consider that in 1997 Intel’s net revenue was $25 billion and it paid $54 million in corporate income taxes to Oregon. Compare that to 2009, when Intel’s net revenues were $35 billion and the company won't tell us what it paid in corporate income taxes to Oregon.

With its output in Oregon up and net revenues company-wide up as well, Intel’s failure to mention any corporate income taxes paid to Oregon speaks volumes.

While Intel points out that “contributions to Oregon-based charities, nonprofits and schools between 2005 and 2009” averaged $5.8 million a year, selectively donating to charity is no substitute for paying taxes to support the public services and public investments which continue to make Oregon a great place for Intel to do business.

You don’t need “Intel Inside” to process that Intel is no longer a model corporate taxpayer.

Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.

By Chuck Sheketoff Oct. 11, 2011