Taxes and Incentives for Hillsboro Businesses
There are several strategic advantages to locating a business in Hillsboro, including a business-friendly tax structure and a variety of incentive programs that can reduce your cost of doing business.
Hillsboro is not subject to some of the typical taxes applicable to businesses in other cities or states.
- No sales tax
- No inventory tax
- No worldwide unitary tax
- No motor vehicle tax
- No business income tax (City or County)
- No direct levies on intangible properties
Current Tax Rates
The current property tax rate for industrial areas is approximately $17.178 per $1,000 of taxable assessed value, and property tax rates are limited to 1.5 percent of real market value (excluding bonds or levies).
Other Tax Considerations
- Personal income tax
5 to 7 percent on annual income greater than $3,450 (single) or $6,900 (joint)
9 percent on annual income greater than $8,700 (single) or $17,400 (joint)
9.9 percent on annual income greater than $125,000 (single) or $250,000 (joint)
- Corporate income tax
Single Sales Factor - applies only to income received on goods and services sold within Oregon
6.6 percent rate applies to taxable income up to and including $1 million
7.6 percent rate applies to taxable income over $1 million
- Corporate activity tax (DOR FAQ)
$250 plus 0.57 percent rate applies to Oregon taxable commercial activity in excess of $1 million
According to the Tax Foundation, a non-partisan research institution, Oregon ranks 8th in the 2020 State Business Tax Climate Index. Compared to its most common competitors, Oregon’s corporate income tax rate and business property tax rates are often lower—in some cases significantly so.
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Additional Tax Information
Financial Incentive Programs
Hillsboro offers a range of financial incentive programs to businesses.
- The Enterprise Zone (E-Zone) Program allows a property tax abatement for eligible businesses within the zone on new capital assets for a three to five-year period. Minimum investment levels and community service fees apply.
- The Strategic Investment Program (SIP) exempts a portion of large new capital investments by “traded sector” businesses from property taxes for 15 years. A community service fee is paid each year to the local jurisdiction equal to 25 percent of the tax savings, up to a maximum of $2 million per year. Cannot be used in combination with the E- Zone Program.
- The Foreign Trade Zone allows deferral, reduction, or elimination of duties for businesses within defined secure areas legally considered outside of U.S. Customs territory.
- Power Utilities benefit programs are available through Portland General Electric, Energy Trust of Oregon, and the Oregon Department of Energy.
- Financing programs are available through Business Oregon.
- Storefront Improvement Grant Program is available within the Downtown development area.
- Large Water Users have the option to defer up to 85 percent of system development charges (SDCs) for water system access, and either finance the balance of the SDC over a 10-year period, or opt for a five-year surcharge (impacting the company’s operations budget rather than its capital budget).
- The State’s Vertical Housing Program offers a partial property tax exemption to mixed-use residential development within City-specified zones, and extends larger tax incentives for development that includes affordable housing. Administered by the State until the end of 2017, the City is currently developing its program in concordance with Senate Bill 310, passed during the 2017 legislative session, that gives control of the program to local jurisdictions.
Contact Val Okada for more information.