Oregon Governor Wants Special Legislative Session To Let Nike Write His State’s Tax Law

After Oregon voters passed a referendum ending one corporate tax break — and with unions and education officials calling for the closure of tax loopholes to raise more revenues — one of the state’s biggest and most identifiable companies is calling for more tax certainty. And if it doesn’t get it, it is threatening to move.

Oregon Gov. John Kitzhaber (D) called a special legislative session Tuesday so lawmakers could consider handing Nike, the Oregon-based apparel and athletic shoe company, the “tax certainty” bill it is demanding. In exchange for the legislation, which will allow the governor to enter into agreements that lock-in current tax laws for certain large companies, Nike says it will create 500 jobs in the state, the Oregonian reports:

Kitzhaber said Nike officials approached him more that a month ago to discuss the company’s expansion plans. Kitzhaber said they told him that Nike was being “heavily courted” by other states but wanted to stay in Oregon.

To do so, the company wanted a guarantee that the state would continue its tax policy, known as the “single-sales factor,” in which companies are taxed only on in-state sales.

“To me, that’s an easy call,” Kitzhaber said.

In addition to the 500 jobs Nike promises to create, Kitzhaber said the tax policy could lead to 12,000 more jobs and a $2 billion boost to Oregon’s economy. But state tax preferences and subsidies aimed at specific businesses often fall flat. New Jersey, for instance, handed a food company $80 million in tax incentives last year, all so it could create just nine jobs. And Sears announced layoffs in Illinois just months after the state gave it millions in tax subsidies.


What Nike wants from Kitzhaber, though, may be even worse. At a time when Oregon is cutting funding for public education and for its colleges and universities — one of which Nike has a close relationship with — Kitzhaber is asking for legislation that would allow the governor to enter into a “tax certainty” agreement with any company that promises to create at least 500 jobs and invest at least $150 million over five years. In exchange for that investment, current tax laws would be set for a time-frame determined by the governor, essentially turning control of the state’s taxes and revenue stream over to any corporation that, like Nike, raised the possibility of moving without the maintenance of Oregon’s already-favorable corporate tax law.