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City gives tax credit to e-commerce

The Dalles City Council voted unanimously Monday to give tax breaks to electronic commerce-related firms in the hope of creating more job opportunities.

“It’s another tool in our economic tool box to help encourage businesses to locate here or expand here,” said Dan Durow, the city’s economic development specialist.

Wasco County Commissioners must agree to grant e-commerce status for the existing enterprise zone that is co-sponsored with the city, and are expected to do at their regular meeting today.

Durow said an example of a qualifying e-commerce business would be a warehouse that fulfills online orders.

The major benefit of the designation is an investment tax credit against the firm’s state income-corporate excise tax liability.

The credit equals 25 percent of the investment cost made in capital assets used in e-commerce operations inside the enterprise zone.

The city and county will not lose much tax revenue, said Durow, because the credit targets investment and not property.

E-commerce companies can also save thousands from an expanded list of readily moveable items, such as equipment and machinery, allowed under the standard exemption from property taxes for three to five years.

The exemption could lower the potential amount of revenue collected by the city and county tax revenues for several years, said Durow, but should be offset by the creation of more jobs.

He said even with local approval for the overlay to the enterprise zone, the designation is not a done deal. He said there are 66 enterprise zones in Oregon and only five will be selected for e-commerce status.

However, state officials don’t expect more than 10 applications for the five additiona e-commerce designations authorized by the legislature in February, for a total of 15.

“We don’t expect that much competition,” said Durow.

He said first priority for the designation is likely to be given to counties with an e-commerce company waiting to set up shop, which The Dalles does not have at this time.

Durow said local governments will try to make a case for the designation based on the work done to set the stage for more job creation.

For example, he said the Port of The Dalles has been getting the infrastructure in place on more than 30 acres of waterfront property to accommodate small and large companies.

In addition, Q-Life has provided more than 33 miles of overhead fiber and three miles of underground fiber to expand wireless internet capabilities throughout town.

And Columbia Gorge Community College is setting up training programs to provide businesses with a “technically fluent” workforce.

The Columbia Gateway Urban Renewal Agency is also helping by assisting financially with revitalization of downtown properties.

Each of these efforts is aided, said Durow, by the Northern Wasco County People’s Utility District’s low-cost reliable electricity. “All these things add up and can have an impact on our ability to compete (for e-commerce status),” he said.

Enterprise zones are granted by the state to areas with higher jobless rates, lower income levels and reduced employment opportunities, as well as vacant land and aging buildings.

The Dalles was first granted a zone in 1987 and it has since been renewed twice at the 10-year mark. The zone includes all port industrial lands and commercial areas within the city limits.

Qualifying manufacturers and other industries, as well as hotels and destination resorts, within the zone qualify for start-up tax breaks.

However, Durow said the benefits are more limited in hotels, where moveable items, such as furniture, are not exempted.

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