Amazon gets $1 billion in tax breaks in eastern Oregon for new data centers

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PORTLAND, Ore. (AP) — Officials in a remote northeastern Oregon county voted to give Amazon an estimated $1 billion worth of tax breaks for having five more data centers there.

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Wednesday’s unanimous vote by five Port of Morrow commissioners was the final step to securing corporate sector incentives, The Oregonian/OregonLive reported. In-state companies can get an exemption from property taxes through local business districts.

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Local officials hope the incentives will result in $12 billion in new Amazon spending in their county along the Columbia River about 160 miles (257 km) from Portland.

Amazon already has four massive data centers in Morrow County and hundreds of local jobs tied to its operations. But its growth has sparked controversial debate over how the Seattle company secures its incentives and an ongoing investigation into some people’s ability to self-treat when it comes to tax breaks. .

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The state is investigating potential conflicts of interest between port officials and a former county commissioner who owns Windwave Communications, a company that provides fiber-optic services to Amazon’s local data centers.

Amazon and Windwave did not respond to requests from the newspaper for information about the two companies’ contract values.

Those two port commissioners, Jerry Healy and Marv Padberg, in an April letter to the state ethics committee said their company has an agreement to provide most of its fiber service to a new U.S. data center. Amazon. But they say they only have a “potential” conflict of interest in voting favorably for the remaining four establishments.

Three other public agencies in Morrow County previously approved the latest deal, each voting with little public discussion. The incentives exempt Amazon from paying nearly three-quarters of the property taxes that other businesses pay.

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But Amazon is Morrow County’s largest taxpayer. Its data centers account for a third of property tax revenue, with a payout of $26 million in 2021, according to the company.

Amazon declined to provide any local regulators for the newspaper to comment on its data center operations.

“We have been active members of eastern Oregon communities since 2011, investing more than $15.6 billion while supporting thousands of local jobs,” Amazon said in a statement. text after Wednesday’s vote.

David Sykes, the chairman of the Morrow County commission, told the paper he saw Amazon as a good fit for a “nice diversified economy”.

It’s a good mix of industries that rescued the county from its reliance on natural resources after a sawmill and coal plant closed, Sykes said.

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Data centers are among the state’s fastest-growing industries, boosted in part by $180 million worth of tax breaks last year alone.

Oregon’s business sector incentive program places no limits on how much local governments can give away in negotiations with businesses. The state created the program for small manufacturers in the 1980s, but data centers with multi-billion dollar high-end computers have recently dominated the program.

Critics question whether the small counties are equipped to negotiate with some of the world’s biggest tech companies. And the value of tax breaks varies widely.

The latest deal between Morrow County and Amazon will offer gifts of double value, such as the one that officials at The Dalles reached with Google in 2021.

The corporate sector program is shutting down in two years, and Oregon lawmakers are considering reforms that could limit the duration of incentives, linking the size of tax breaks to jobs create and require public notice before voting on the agreements.