by Christopher Freeburn | December 11, 2012 10:49 am
Oregon Governor John Kitzhaber will call a special session of the state’s legislature on Friday to request the power to guarantee that tax rules will stay unchanged for Nike (NYSE:NKE) if the company commits to expand operations in the state.
Citing concerns that other states were attempting to lure Nike away from Oregon, the governor said he wanted to act fast. Nike wants the state to guarantee that the company’s state income tax will only be calculated on Oregon sales for a specified period, even if the tax law is later changed, the Associated Press noted.
The governor will ask the legislature to authorize such a pledge, provided the athletic footwear maker agrees to hire at least 500 workers and invest $150 million in the state.
An economic impact study found that the company’s expansion could result in 12,000 new workers in Oregon and a $2 billion annual bump to the state’s economy by the end of the decade. However, Nike hasn’t said how many workers it might hire in Oregon beyond the 500 cited in its negotiations with the state, and the impact study is based on projections.
The governor argues that the deal isn’t a tax break for the company. The legislature is expected to approve his request.
Shares of Nike rose fractionally in Tuesday morning trading.
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