Strategic Investment Program
The Strategic Investment Program (SIP) offers a 15-year property tax exemption on a portion of large capital investments for projects developed by "traded sector" businesses.
Who is Eligible?
The SIP program is available for projects developed by "traded sector" businesses (??as defined in ORS 285A.010??), which are, "industries in which member firms sell their goods or services into markets for which national or international competition exists.?"?
A project's cost must be at least $25 million in a rural area or $100 million otherwise. The actual exemption is on property value in excess of a taxable portion, which starts at $100 million for all urban projects, while in rural areas*:
| Total Investment Costs | Initial Taxable Portion Amount |
|---|---|
| Not more than $500 million | $25,000,000 |
| Between $0.5 and $1.0 billion | $50,000,000 |
| Greater than $1.0 billion | $100,000,000 |
*A "rural area" is an area located entirely outside the Urban Growth Boundary of a city with a population of 40,000 or more at the time of the SIP application, or in a Rural Strategic Investment Zone (SIZ) designated before October 5, 2015. The taxable portion is based on the property's real market value and grows three percent per year.?
What is the Application Process?
There are two options for a SIP project application:
- Ad hoc approval. The county holds a public hearing and negotiates an agreement between the business and county and city (if applicable).
- Strategic Investment Zone (SIZ). SIZ is designed to provide a more streamlined, local process. At any time, a county and city may submit a request through Business Oregon for the Business Oregon Commission to designate a SIZ.?
What are the Program Requirements?
Community Service Fee:
Companies must pay the respective county a community service fee as set by law. The fee is contained in the agreement with the business, which may include additional requirements. The county must also sign a separate agreement with other local governments for distributing the fee.
Reporting Requirements:
For any SIP project that is exempt in the prior tax year, the business must submit a report to Business Oregon detailing its employment and payroll. The report is used to evaluate the program's performance and provide estimates of state personal income tax revenue that may be shared with local governments.?
Strategic Investment Zones (SIZ) in Oregon as of September 2017
Gresham SIZ #1
- Designation: January 16, 2009
- Sponsors: Multnomah County, City of Gresham
- Features: 500 acres prime manufacturing land inside Gresham
Clackamas Rural SIZ #1
- Designation: September 24, 2010
- Sponsors: Clackamas County; cities of Canby, Estacada, Happy Valley, Molalla and Sandy
- Features: 1,791 square miles of rural area across county/cities
Clackamas Urban SIZ #2
- Designation: September 24, 2021
- Sponsors: Clackamas County; cities of Happy Valley, Lake Oswego and Milwaukie
- Features: 46 square miles of non-rural area across county/cities
Business Oregon
https://www.oregon.gov/biz/programs/SIP/Pages/default.aspxCategory: Oregon, Business, State