Report: Amazon Gets Tax Breaks to Build More Oregon Data Centers

Local officials have approved 15 years of property-tax free operation on the Umatilla County property.

Yevgeniy Sverdlik

October 22, 2019

2 Min Read
Expo hall at AWS re:Invent 2018
Expo hall at AWS re:Invent 2018Amazon Web Services

Amazon is gearing up to start construction on its seventh data center site in northeastern Oregon, local public radio KUOW reported.

The site is in Hermiston, a small city in Umatilla County. City and county officials last week voted to give the company 15 years to operate on the site property tax-free. There’s no sales tax in Oregon, which is one of the big reasons some of the hyperscale cloud platforms, such as Amazon Web Services, Facebook, Google, and Apple, have built massive data center campuses there.

There are currently four AWS data center sites in Umatilla (including the one voted on last week) and three in neighboring Morrow County, according to KUOW.

While the new Amazon tax break wasn’t completely controversy-free, it didn’t appear to generate anywhere near the amount of public outrage generated by the company’s “location scouting” last year for a second headquarters.

“A few skeptical taxpayers” spoke against the Hermiston tax break at the city and county board meetings, according to the KUOW report. It also quoted executives from two advocacy non-profits, one of whom said the “tax breaks tend to be a waste of money,” while the other said the local officials were “giving away more than we need to.”

But the officials’ position is that considering the company’s expected investment – a minimum of $200 million – job creation, agreed-upon community fees, and tax payments when the incentives expire add up to profit for the city and county, even with 15 years of tax-free property ownership.

Related:Cloud Giants’ 2019 Data Center Investment a Mixed Bag for Providers

There’s also the fear that Amazon will build its data centers somewhere else if it doesn’t get its way. “In my estimation if we decline them, we won't get anything from them, because they will go someplace else,” the report quoted commission chair George Murdock as saying.

After a relatively low level of investment in new data centers in 2018, Amazon has stepped up its infrastructure spend this year. So far in 2019, it launched data centers in Bahrain, announced an $800 million data center construction project in Argentina, and paid about $116 million for 90 acres of land for data center construction in Northern Virginia, already home to its largest cloud availability region.

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