12/12/2012 10:13 am ET

Nike Threatens To Expand Outside Of Oregon Without Tax Break Guarantee

Apparently Nike has a lot of influence over Oregon lawmakers.

Oregon Gov. John Kitzhaber called a special session of the legislature in an attempt to give the company more certainty when it comes to taxes, according to The Oregonian. Nike approached the governor about a month ago with a deal: The company would agree to a major expansion in Oregon instead of growing elsewhere as long as the state kept its policy of only levying taxes on in-state sales.

Though Kitzhaber claimed the Nike expansion could create 12,000 jobs directly and indirectly and boost the state’s revenue by $2 billion per year in calling the special session, those figures may be too good to be true. Local governments give companies more than $80 billion in subsidies per year to lure them to certain areas, The New York Times reports -- but some experts have questioned whether those breaks actually hurt localities more than they help.

In addition, local officials say they rarely have enough data to figure out if the companies actually provide the jobs they promise to create, and some admit that businesses may have decided to locate in their region even without the incentives, according to The NYT.

But some localities are moving forward with the incentives anyway. After granting Apple a controversial, multi-million dollar tax break, one Texas county considered a proposal to give tax rebates of up to 80 percent to companies that invest at least $25 million in expansion, hire at least 50 local workers and train or hire potential area employees who are “economically disadvantaged.”



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