Worried Nike Will Flee, Governor Kitzhaber Wants Special Tax Code for Sportswear Giant

Portland Mercury:

Looking to expand its operations, Nike has "active negotiations" with other states, warned Governor John Kitzhaber at a press conference this morning. To keep the sportswear giant in Oregon, Kitzhaber has called a special one-day session of the Oregon legislature to discuss one big idea: creating a law that would allow the governor to handpick companies for which he will agree to freeze any increases in the state's corporate tax rate for years at a time. The governor's special agreement would only be eligible for companies planning an investment that would result in at least 500 jobs and $150 million in capital over five years. Kitzhaber said Nike's planned expansion would create 12,000 jobs in Oregon. While Nike was founded in Oregon nearly 50 years ago, Kitzhaber said the company was "seeking assurance that the state won't change its tax rules after they make this commitment" to expand. Kitzhaber noted that Oregon "doesn't have the resources" other larger states, like California, do to attract companies, so he would like to grant Nike "a continuation of Oregon's existing tax policy." "They didn't say, 'If you don't do this, we're leaving,'" said Kitzhaber, this morning. "But they did say they have active negotiations with other states." As the New York Times reported this month more and more companies across the country are seeking—or demanding—special tax incentives from states. States now pay out a collective $80.4 billion in tax incentives to businesses annually. Under the special tax plan, Oregon would forgo any revenue from new business taxes that Nike would have paid. But Kitzhaber says the idea is "revenue neutral" because Nike will be adding jobs and capital investment to the Oregon economy. Oregonians passed a corporate tax increase in 2010, with Measure 66 and 67, which increased taxes on corporate profits over $250,000. Nike was certainly affected by that tax, but when a reporter asked Kitzhaber this morning whether the measures had a negative impact on business, Kitzhaber said, "Not really." Legislators will take up the idea next Friday, December 14th. [ Subscribe to the comments on this story ]

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