Strategic Investment Program (SIP)

Strategic Investment Program (SIP)

Program Type: Property tax exemption program

Overview: 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.

Geographic Scope: Oregon

Tax Exemption Period: 15 years

Eligibility Requirements

Business Requirements:

Project must be developed by "traded sector" businesses (as defined in ORS 285A.010) - industries in which member firms sell their goods or services into markets for which national or international competition exists

Investment Thresholds:

Minimum $25 million in capital investment in a rural area

Minimum $100 million in capital investment otherwise (urban areas)

Taxable Portion Structure

Urban Projects:

Initial taxable portion: $100 million

Rural Area Projects:

Total Investment Costs $0-$500 million: Initial taxable portion $25 million

Total Investment Costs $0.5-$1.0 billion: Initial taxable portion $50 million

Total Investment Costs Greater than $1.0 billion: Initial taxable portion $100 million

Rural Area Definition: An area located entirely outside the Urban Growth Boundary of a city with a population of 40,000 or more at the time of SIP application, or in a Rural Strategic Investment Zone (SIZ) designated before October 5, 2015.

Taxable Portion Growth: The taxable portion is based on the property's real market value and grows 3% per year.

Application Process

Two Options:

1. Ad hoc approval: The county holds a public hearing and negotiates an agreement between the business and county and city (if applicable)
2. Strategic Investment Zone (SIZ): At any time, a county and city may submit a request through Business Oregon for the Business Oregon Commission to designate a SIZ. SIZ is designed to provide a more streamlined, local process.

Program Requirements

Community Service Fee:

Companies must pay the respective county a community service fee as set by law

Fee is contained in the agreement with the business, which may include additional requirements

County must 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

Report must detail employment and payroll

Report is used to evaluate program performance and provide estimates of state personal income tax revenue that may be shared with local governments

Strategic Investment Zones (SIZ) in Oregon

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

Contact

Administering Agency: Business Oregon

Website: https://www.oregon.gov/biz/programs/SIP/Pages/default.aspx