Amazon Invests in Eastern Oregon: $1 Billion Tax Breaks for New Data Centers

Officials in a remote northeastern Oregon county have agreed to provide tax benefits worth an estimated $1 billion to Amazon for five additional data centers, As reported by

Wednesday’s(10 May 2023)Β  unanimous vote by Port of Morrow’s five commissioners was the last step in securing the enterprise zone incentives, The Oregonian/OregonLive reported. Companies in the state can receive property tax breaks through local enterprise zones.

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Officials in a county on the Columbia River, approximately 160 miles (257 kilometers) from Portland, hope tax breaks would entice Amazon to spend $12 billion there. Several hundred local jobs directly relate to Amazon’s presence in Morrow County, home to four of the company’s massive data centers.

However, the company’s success has sparked heated controversy over the Seattle firm’s incentive deals and an ongoing investigation into allegations of self-dealing by some who granted the company tax benefits.

Windwave Communications is a company that supplies Amazon with fiber-optic service. The state is looking into whether or not any port authorities or a former county commissioner have conflicts of interest due to their ownership of the company.

Amazon and Windwave haven’t responded to requests from the newspaper for details on the value of the two companies’ contracts.

In an April letter to the state ethics committee, those two port commissioners, Jerry Healy, and Marv Padberg, said their company does have a deal to provide most of the fiber-optic service to one new Amazon data center.

However, they claimed that their “potential” conflict of interest does not prevent them from voting on incentives for the remaining four facilities.

Amazon Invests in Eastern Oregon

The latest agreement has already been approved by three other public bodies in Morrow County with little public debate. The incentives exempt Amazon from paying nearly three-quarters of other businesses’ property taxes.

However, Amazon pays the most taxes in all of Morrow County. The corporation expects to spend $26 million in property taxes related to its data centers in 2021. Amazon did not allow the publication to speak with any of its local managers about the company’s data center operations.

Amazon said in a statement released following Wednesday’s vote, “We’ve been an active member of eastern Oregon communities since 2011, investing more than $15.6 billion while supporting thousands of local jobs.”

Morrow County’s commission chairman, David Sykes, told the newspaper that Amazon would be an excellent addition to the county’s “nicely diversified economy.”

It’s a good blend of industries, Sykes said that rescued the county from its dependency on natural resources after a sawmill and coal plant shut down. Because of tax advantages totaling $180 million in just the past year, data centers have become one of the state’s fastest-growing industries.

The following is up-to-date information regarding recent events that have taken place in Oregon:

There is no cap on the amount of free money that municipalities can offer in enterprise zone incentive talks with businesses in Oregon. Although initially designed for smaller factories, the program is now dominated by large data centers with billions of dollars worth of high-end computers.

Some people doubt that smaller countries have the resources to bargain with multinational digital giants. The tax credits also have a wide range of values. The latest contract between Morrow County and Amazon will generate gifts almost twice as lucrative, for example, as an accord official in The Dalles signed with Google in 2021.

Legislators in Oregon are debating potential revisions to the enterprise zone program that would end the incentives earlier, tie the magnitude of the tax breaks to the number of jobs produced, and require public notice before voting on the deals.

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