House passes bill to attract Google, company says it’s not impressed


Google Fiber is no closer to launching in Portland after passage of tax law.

Share this article!

BY JACOB PALMER | DIGITAL NEWS EDITOR

Oregon lawmakers wanted to fast track Google Fiber’s launch in Portland with a bill adjusting the state’s tax system.

The company said their efforts may have been for naught, OregonLive.com reports.

The House of Representatives voted 52-2 in favor of legislation that addresses the taxing of companies with “intangible” assets.

From OregonLive.com:

Tech companies testifying on the bill said few if any other states value assets that way and warned that Oregon’s tax methodology – which had been in flux until last October, when the state Supreme Court upheld it – would deter future telecom and data center investment in the state. In response, Oregon lawmakers sought to ease the effect of the tax with exemptions and valuation limits in SB611. But in Thursday’s letter to Oregon legislators, Google public affairs manager Darcy Nothnagle said lawmakers did it wrong – at least in regard to high-speed telecom networks. …

There are two problems, according to Google:

  • SB611 offers an exemption from the state’s tax methodology to companies with the capacity to offer Internet service of “at least one gigabit.” Google Fiber offers speeds “up to a gigabit” per second – that’s 1,000 megabits per second, 25 times faster than the current broadband standard. So the law, as written, would make Google Fiber ineligible for the tax exemption.
  • The bill sets a 20-year limit on the tax exemption. Nothnagle said Google wants a longer-term exemption given the size of the company’s prospective investment. Portland estimates Google Fiber would have to spend at least $300 million to bring the service to the Portland area, and a good deal more if it also serves the city’s suburbs.

An update to Mike Rogoway’s story includes a promise from Sen. Mark Hass that the Senate would address Google’s concerns.

In another story published on OregonLive.com, Rogoway writes that the bill that just passed the House trimmed back considerations from earlier drafts for Comcast.

The revised version approved by the House on Friday changes the accounting formula that limits taxes on Comcast and other telecom companies, reducing the lost revenue by more than half: “Comcast continues to support the bill because we believe it will have a positive impact on the state’s business environment while also supporting the critical needs of our schools, cities and counties in Oregon,” the company said in a written statement.

The League of Oregon Cities backed the changes, too, writing: “The excessive tax break to cable and Internet companies was made much more reasonable” by the changes in the House. The League, along with the city of Portland and other local governments, had previously opposed the bill.

 




Latest from Oregon Business Team