Hermistons designation as an electronic commerce zone this summer could draw more businesses to the area and help current businesses expand.
Assistant City Manager Mark Morgan explained some of the benefits of the designation at the Hermiston Chamber of Commerce Business to Business luncheon Tuesday.
When we were designated as this e-commerce zone this past summer, we actually became the only area on the eastern half of the state to be designated as an e-commerce zone, he said. Its an extremely powerful and scalable tax incentive for folks in the area or businesses looking to locate to Hermiston.
Electronic-commerce businesses within an e-commerce zone receive a state income tax credit for investments in capital assets, or business property, according to information from Business Oregon. The credit is for 25 percent of the investment up to an annual maximum of $2 million.
Electronic commerce is defined as engaging predominantly in transactions via the Internet or an Internet-based computer platform, including taking orders, closing sales, making purchases, providing customer service and other activities that serve the business overall purpose, even if retail in nature, according to Business Oregon.
Theres a lot of potential opportunities here for all sorts of business, Morgan said. It doesnt just mean that youre an Amazon.com selling retail items online.
He said, for example, providing a service to a business through an online platform would qualify, along with a business that acquires clients online but has a physical processing center for those claims, such as a distribution center.
If (businesses) spend $30 million on a warehouse in Hermiston, 25 percent of that investment that serves their online operations, that could be used against their state of Oregon income taxes, Morgan said.
The incentives could make Hermiston attractive for business relocation, he said.
What we really wanted to do with getting this designation is creating an opportunity to attract businesses that really diversify the local economy, he said.
Morgan encouraged people interested in more information to contact him at Hermiston City Hall, 180 N.E. Second St., 541-567-5521.
We can see if there are some opportunities to help them expand their business, Morgan said, because again, this is all tied to new capital investment in their business that they can then use against their state of Oregon income taxes.