Representative McLane to fix Oregon Facebook Tax

Representative McLane to fix Oregon Facebook Tax
Interview, Rep. Mike McLane
Taxpayer Association Oregon lawmaker profile

Oregon lawmakers led by Rep. Mike McLane (R-Bend) will aggressively push legislation next month to protect billions of dollars worth of data center investment throughout Oregon. McLane proposed HB 4067 after the Oregon Department of Revenue notified Facebook that its recently built Prineville data center would be taxed like a utility—a move that effectively nullified the enterprise zone agreement with Crook County under which the data center was constructed and would likely result in a steep tax bill. Qualifying companies locating in a Crook County enterprise zone are taxed by the county, not the State, and enjoy certain property tax exemptions for 15 years.

According to McLane, the State’s move has created “a climate of uncertainty and undermined the integrity of our enterprise zones.” He noted that Facebook would not have located its data center in Prineville without the tax incentives provided through the enterprise zone agreement. Unless something is done, McLane believes that other data center projects, including additional Facebook projects, poised to move forward in Oregon will locate elsewhere, and Oregon will lose out.

McLane’s bipartisan bill makes it clear that any data center built in an enterprise zone and is in compliance with an enterprise zone agreement will not be taxed by the State as a utility. With 47 cosponsors, HB 4067 has the support of a majority of House members, 13 senators, both speakers, as well as caucus and key committee leaders.

Governor Kitzhaber favors a temporary administrative solution for Facebook through the end of 2013, at which time a comprehensive review of relevant statutes would ensue. McLane says that’s a bad idea.

“The problem with waiting until the end of 2013 is that Oregon will lose billions worth of data center investment. The data center industry and technology are moving so fast that companies need to be assured of what the terms are long-term or they will locate to other states. In this session, with our high unemployment and general fund problems, that would be a travesty.”

More on State Representative Mike McLane