OR — State Policy Updated 2026-07-17

Oregon

Statewide baseline tax context Property tax abatements and income tax credits used by da... 2026 incentive changes Zoning and land-use restrictions Environmental and operational constraints Moratoriums and pauses

1) Incentive programs

Statewide baseline tax context (not a targeted incentive)

  • Oregon does not impose a general sales or use tax, which remains a broad statewide tax-context advantage for capital-intensive equipment purchases rather than a data-center-specific incentive (Oregon Department of Revenue, 2026-06-10).

Property tax abatements and income tax credits used by data centers

ProgramWhat it offersEligibility thresholds & conditionsDuration / sunsetClean-energy or other conditions
Standard Enterprise Zone (ORS 285C.175, 285C.200, 285C.215)Local property tax exemption on qualified new investment inside an enterprise zone (Business Oregon, 2026-06-10).Firm must be an eligible business operating in the zone, own/lease qualified property in the zone, and meet employment-growth and local authorization requirements.Base exemption is generally 3 years. HB 4084 expanded extension authority for many projects but, for qualified property used in operating a data center, bars the extended exemption period and temporarily bars new data-center project authorizations under ORS 285C.140 until 90 days after the 2027 regular session adjourns sine die (Oregon Legislative Assembly, 2026-04-06).No statewide clean-energy condition in the enterprise-zone statute itself; local agreements may add conditions. HB 4084 also excludes data-center property from the new flexible hiring-timeline / alternative-performance-criteria provisions (Oregon Legislative Assembly, 2026-04-06).
Construction-in-Process Enterprise Zone Exemption (OAR 123-674-6000; ORS 285C.170)Property tax exemption for qualified enterprise-zone property not yet in service (Oregon Secretary of State, 2026-06-10).Available to authorized firms; applies to property not yet in service as of the assessment date; requires annual filing with county assessor.Up to 2 years before in-service property starts the standard enterprise-zone exemption (Oregon Secretary of State, 2026-06-10).No statewide clean-energy condition in rule.
Long-Term Rural Enterprise Zone Facilities Program7- to 15-year property tax exemption for certified facilities in rural enterprise zones; property under construction can be exempt before the long-term exemption period (Business Oregon, 2026-06-10).Requires a local written agreement with zone sponsors; county and city approval where applicable; agreement can add local requirements; school support fee applies in later years.7 to 15 years plus construction period (Business Oregon, 2026-06-10).No statewide clean-energy condition; local agreements may add requirements.
Strategic Investment Program (SIP)15-year property tax exemption on a portion of large traded-sector investments (Business Oregon, 2026-07-17).Traded-sector and local approval requirements apply. Effective July 1, 2026, indexed minimum investment thresholds are $162.8 million generally and $43.4 million in rural areas (Business Oregon, 2026-07-17).15 years; taxable portion grows over time. The 2026-27 annual community-service-fee cap is $3.167 million (Business Oregon, 2026-07-17).No statewide clean-energy condition in the program description; local agreements can add conditions.
E-Commerce Zone Tax Credit (ORS 315.507; 315.508)Income/corporate excise tax credit equal to 25% of qualifying capital investment, subject to statutory limits (OregonLaws, 2026-06-10).Must be engaged in electronic commerce in a designated e-commerce zone/city; property must also qualify for enterprise-zone exemption within the statutory period.Statute provides no new credits for tax years beginning on or after Jan. 1, 2018, except carryforward provisions (OregonLaws, 2026-06-10).No clean-energy condition.
Oregon Investment Advantage (OIA)10-year taxable-income exemption for certified businesses in eligible counties; can be combined with property tax abatement (Business Oregon, 2026-06-10).Certification in eligible counties; recertification possible.10 years per certification cycle (Business Oregon, 2026-06-10).No clean-energy condition in program description.

2026 incentive changes

  • HB 4084 (2026, Chapter 50) is the major 2026 incentive change: it updates enterprise-zone rules, expands some non-data-center enterprise-zone flexibility, creates a Joint Permitting Council / coordinated permit process for qualifying traded-sector projects, and restricts data-center use of the enterprise-zone program (Oregon Legislative Information System, 2026-06-10; Oregon Legislative Assembly, 2026-04-06).
  • The data-center enterprise-zone restriction is not a construction ban. It is a tax-incentive pause and limitation: newly built data centers are temporarily barred from new project authorizations under ORS 285C.140 until after the 2027 regular session, and data-center property cannot receive the extended exemption period otherwise expanded by HB 4084 (Oregon Legislative Assembly, 2026-04-06).
  • The Legislative Revenue Office issued separate HB 4084 revenue-impact statements. For the job-credit change, LRO estimated General Fund increases of $3.5 million in 2025-27, $13.8 million in 2027-29, and $16.7 million in 2029-31 (Oregon Legislative Revenue Office, 2026-03-01). For the property-tax provisions, including the data-center carveout, LRO estimated local-government revenue impacts of $0 in 2025-27, $0 in 2027-29, and +$27.0 million in 2029-31, with local non-bond impacts of about +$27 million per year starting in 2030-31 from the data-center extension prohibition and about -$9 million per year starting in 2032-33 after combining that change with the broader extended-exemption expansion (Oregon Legislative Revenue Office, 2026-03-01).

2) Restrictions and moratoriums

Zoning and land-use restrictions (local)

  • Morrow County: Data centers are permitted outright only in MG, PI, and ALI zones; conditional use is available in UADM; data centers are prohibited or not listed in many other zones including EFU, SAI, AI, AA, AH, multiple residential zones, and several commercial zones (Morrow County Zoning Ordinance, 2026-06-10).
  • Forest Grove: Data centers are treated as “information” uses in Light Industrial zoning; city approval of the first Forest Grove data center relied on this zoning despite neighborhood concerns over noise, light, wetlands, and building scale (Hillsboro News-Times, 2025-08-18).
  • Hermiston: The 2025 urban-growth-boundary expansion applied Heavy Industrial (M-2) zoning with a Hyperscale Data Center overlay to allow large-scale data centers, with Umatilla County co-adoption required (City of Hermiston, 2025-09-23).

Environmental and operational constraints

  • Air emissions: DEQ’s streamlined data center permit framework applies to backup generators and uses equipment-control and emissions-threshold conditions; generator emissions therefore remain subject to DEQ permit terms rather than local land-use approval alone (Oregon DEQ, 2026-06-10).
  • Water withdrawals: Oregon water rights remain governed by prior appropriation; data-center water use generally requires an applicable water right, municipal supply authorization, or other OWRD-recognized authority (Oregon Water Resources Department, 2026-06-10).
  • New Hillsboro water-use disclosure: Hillsboro estimates that its water department served about 14 data-center sites in 2025 and that those sites used approximately 111 million gallons, equal to 1.76% of citywide demand and 3.4% of industrial demand. The city cautions that its estimate excludes sites served by Tualatin Valley Water District (City of Hillsboro, accessed 2026-07-17).
  • Water and wastewater opposition intensified in 2026: Amazon agreed to pay $20.5 million to settle claims related to nitrate-contaminated groundwater in northeast Oregon, while denying liability; reporting tied the allegations to industrial wastewater from facilities including data centers at the Port of Morrow and noted the broader lawsuit against other defendants continued (Tri-Cities Area Journal of Business, 2026-04-01).

Moratoriums and pauses

  • As of 2026-07-17, Oregon has not adopted a statewide land-use moratorium on data center construction. It has adopted a temporary statewide pause on new data-center enterprise-zone authorizations through HB 4084 (Oregon Legislative Assembly, 2026-04-06).
  • Hillsboro policy direction, but no enacted moratorium yet: After its June 2 and June 9 work sessions, the City Council reached consensus directing staff to develop options for a distinct data-center use category, new development and environmental/utility-impact standards, narrower siting areas, changes to enterprise-zone community-service fees (including a utility-affordability fund), and steps needed for a temporary moratorium. The city emphasized that any resulting code, fee, or moratorium proposal would return for later Council review and approval; no final moratorium had been enacted by 2026-07-17 (City of Hillsboro, 2026-06-11).
  • OPB reported that Hillsboro received 17 data-center enterprise-zone applications between March and May 2026, apparently ahead of the June 6 state-imposed tax-abatement pause, and that more than 200 people attended the June 2 City Council meeting to object to data-center tax breaks and growth (OPB, 2026-06-04).
  • Challenge to Hillsboro tax-break approvals: On June 22, 1000 Friends of Oregon and other petitioners filed a Washington County Circuit Court writ-of-review petition challenging Hillsboro and Washington County’s approval of the 17 enterprise-zone applications. The petition alleges that the approvals did not comply with applicable law; it is a pending challenge, not a judicial finding on the merits (Washington County Circuit Court petition, 2026-06-22).
  • La Pine project rejection and proposed citizen rules: On May 27, the La Pine City Council voted unanimously to end consideration of a proposed sale of industrial-park land for Boxminer’s 20 MW data center after staff found unsupported or materially discrepant revenue and employment projections. A citizen initiative filed in June would impose data-center noise and lighting limits and annual reporting of electricity, water, generator runtime, and jobs; organizers were still gathering signatures for a possible November ballot, so those standards were not law as of July 17 (City of La Pine Council minutes, 2026-05-27; KTVZ, 2026-06-16; La Pine Data Center Accountability, accessed 2026-07-17).

3) Local governance and preemption

4) Legislative activity (2024-2026)

  • HB 3546 (2025) - POWER Act (Chapter 323; effective June 16, 2025): Directs the PUC to create a separate rate class for large energy use facilities, defined as facilities capable of using 20 MW or more and primarily engaged in NAICS 518210 (data processing, hosting, and related services). It also requires biennial PUC reporting from September 2026 through January 2035 on load trends from large energy use facilities (Oregon Legislative Information System, 2026-06-10).
  • HB 4084 (2026) - enacted as Chapter 50: Establishes the Joint Permitting Council / coordinated permitting program, updates enterprise-zone requirements, restricts enterprise-zone use for data centers, and takes effect on the 91st day after adjournment sine die (Oregon Legislative Information System, 2026-06-10; Oregon Legislative Assembly, 2026-04-06).
  • SB 1586 (2026) - not enacted: The measure would have modified the semiconductor research tax credit and included broader provisions touching enterprise zones, regionally significant industrial sites, and Washington County rural-reserve changes for high-technology and advanced-manufacturing purposes; OLIS lists no chapter number and the measure remained in Senate Finance and Revenue (Oregon Legislative Information System, 2026-06-10).
  • HB 3698 (2025) - not enacted: The 2025 proposal would have required quarterly data-center water and electricity reporting to OWRD/ODOE and directed EQC to adopt standby-generator emissions standards, but OLIS lists no chapter number and the measure remained in House Climate, Energy, and Environment after the 2025 session (Oregon Legislative Information System, 2026-06-10).
  • SB 553 (2025) - not enacted: The 2025 proposal would have required ODOE to study data-center power usage and report by Sept. 15, 2026, but OLIS lists no chapter number and the measure remained in Senate Energy and Environment after the 2025 session (Oregon Legislative Information System, 2026-06-10).
  • Governor’s Data Center Advisory Committee (2026): Governor Tina Kotek’s committee held its June 26 meeting on energy affordability, public revenue, and incentives. Its facilitator summary records presentations on the POWER Act and Oregon tax programs but no final committee recommendations. Meeting 6 is scheduled for July 31, draft-report deliberation for August 4, and a final public listening session for September, with the final report due in October 2026 (Oregon Department of Energy, 2026-07-17; Oregon Department of Energy facilitator summary, 2026-06-26).
  • Federal delegation input to the state process: Senators Ron Wyden and Jeff Merkley asked the advisory committee to address energy demand and transmission transparency, rate impacts, water quantity and quality, noise and visibility, land use, Tribal consultation, and public accountability. The July 2 letter is policy input, not an adopted state requirement (U.S. Senators Wyden and Merkley, 2026-07-02).

5) Notable projects and operators

  • Google (The Dalles, Wasco County): Google began operations in The Dalles in 2006 and remains a major Oregon data-center operator; OPB reported in March 2026 that Google completed a fourth data-center building in 2025 and planned to finish another building in 2026 (Google Data Centers, 2026-06-10; OPB, 2026-03-02).
  • AWS regional presence: AWS states it has maintained data center operations in Morrow and Umatilla counties for more than a decade and invested $22.9 billion across Oregon since 2010 (About Amazon, 2024-10-25).
  • Amazon / PDX 154 (Morrow County): Morrow County planning officials approved Amazon’s PDX 154 land-use application on March 31, 2026 for a data-center campus east of Boardman Airport with four data-center buildings totaling roughly 816,000 square feet, an industrial water building, stormwater and wastewater evaporation ponds, and a septic drain field, subject to conditions addressing stormwater, wastewater, lighting, and airport impacts (Tri-Cities Area Journal of Business, 2026-04-14).
  • Meta (Prineville, Crook County): Meta’s official data-center locations list Prineville, Oregon with more than $2 billion invested and ongoing operations (Meta, 2026-06-10).
  • QTS (Hillsboro, Washington County): QTS operates multiple Hillsboro campuses with large MW-scale capacity in the region (QTS, 2026-06-10).
  • Flexential (Hillsboro, Washington County): Flexential closed the acquisition of its Hillsboro 4 and Hillsboro 5 data centers on May 28, 2026, adding ownership of a fully leased 138,000-square-foot, 18 MW Hillsboro 4 facility and a 358,000-square-foot, 36 MW Hillsboro 5 facility; the company says it now owns 496,000 square feet across 20 acres in Hillsboro (Flexential, 2026-05-28).
  • STACK POR03 expansion (Hillsboro, Washington County): STACK announced a 121 MW expansion of its Hillsboro campus: a 25 MW POR03D building targeted for the fourth quarter of 2027, followed by planned 42 MW and 54 MW buildings, which would take the campus to 200 MW (Data Center Dynamics, 2026-02-11).
  • CoreSite campus application (Hillsboro, Washington County): Hillsboro opened administrative review of CoreSite’s proposed 19.73-acre campus, including a 234,531-square-foot first phase and a 312,708-square-foot second-phase shell plus generators, stormwater facilities, and natural-resource mitigation. This was an application under review, not a final land-use approval (City of Hillsboro, 2026-06-18).
  • Oakline at Mill Creek / Verrus (Salem, Marion County): Verrus began exploring a data-center campus in Salem’s Mill Creek Corporate Center. The city described the project as pre-application and estimated investment above $5 billion and about 75 permanent jobs; the proponent described three buildings on roughly 75 acres, with operation in 2028 if approved. Data centers are an allowed use in the site’s Employment Center zoning, but the specific project had not received city approval by 2026-07-17 (City of Salem, 2026-07-14; KPTV, 2026-07-15).
  • Boxminer proposal (La Pine, Deschutes County) — ended: The City Council voted unanimously on May 27 to close the prospective industrial-land sale rather than advance Boxminer’s proposed 20 MW facility, after city staff found that the developer had not substantiated its revenue and employment projections (City of La Pine Council minutes, 2026-05-27).
  • Hermiston pipeline: Hermiston’s 2025 UGB expansion and HDC overlay remain the major local land-supply action explicitly intended to provide land for hyperscale data centers (City of Hermiston, 2025-09-23).

Source URLs (news and local government announcements)

https://olis.oregonlegislature.gov/liz/2026R1/Measures/Overview/HB4084
https://olis.oregonlegislature.gov/liz/2026R1/Downloads/MeasureDocument/HB4084/Enrolled
https://olis.oregonlegislature.gov/liz/2026R1/Downloads/CommitteeMeetingDocument/315834
https://olis.oregonlegislature.gov/liz/2026R1/Downloads/CommitteeMeetingDocument/315835
https://www.oregon.gov/energy/Get-Involved/Pages/Oregon-Data-Center-Advisory-Committee.aspx
https://www.hillsboro-oregon.gov/community/data-centers
https://www.hillsboro-oregon.gov/Home/Components/News/News/17468/
https://friends.org/sites/default/files/2026-06/Petition%20%28for%20Writ%20of%20Review%29%28file-stamped%29.pdf
https://www.hillsboro-oregon.gov/Home/Components/News/News/17484/4315
https://www.datacenterdynamics.com/en/news/data-center-developer-stack-to-expand-hillsboro-campus-by-121mw/
https://www.cityofsalem.net/Home/Components/News/News/2169/15?pe=30&ps=20
https://www.kptv.com/2026/07/16/75-acre-data-center-proposed-salem/
https://www.lapineoregon.gov/DocumentCenter/View/3374/061026-City-Council-Packet
https://ktvz.com/news/top-stories/2026/06/16/petition-filed-to-increase-transparency-and-control-over-data-centers-in-la-pine/
https://www.opb.org/article/2026/06/03/data-center-hillsboro-residents-city-council-meeting/
https://www.aboutamazon.com/news/aws/amazon-web-services-data-centers-us?p=how-data-centers-drive-eastern-oregons-local-business-growth
https://www.tricitiesbusinessnews.com/articles/amazon-plans-another-data-center-southwest-of-tri-cities
https://www.tricitiesbusinessnews.com/articles/amazon-to-pay-205-million-settlement-over-northeast-oregon-nitrate-pollution
https://www.flexential.com/resources/press-release/flexential-secures-strategic-real-estate-ownership-hillsboro-oregon