Data Centers in Hillsboro: Your Questions Answered

Do data centers pay property taxes?

Yes. Data centers pay property taxes like many other entities in the City of Hillsboro. Data centers are often very expensive facilities to build and equip resulting in extremely high property values. In addition to paying taxes on land and buildings, businesses in Washington County also pay property tax based on the value of equipment, fixtures, and furniture. How taxes are calculated and charged depends on where the data center is located and the specific details of the facility.

In some areas of Hillsboro, data centers may be eligible for property tax incentives also known as abatements, if they meet the requirements of state and local tax abatement programs. The most common program is called the Enterprise Zone. Eligible businesses within Hillsboro's Enterprise Zone may qualify for a temporary property tax abatement on new investments for a 3 to 5-year period. After this period, regular property taxes apply.

In Hillsboro, all data centers and their tenants, including those that are receiving a property tax abatement, consist of an assessed value and exempted real market value (for those with a property tax abatement) of approximately $11 billion.

In 2025, the 12 data center-related entities receiving property tax abatements consisted of approximately $7.2 billion of exempted real market value. Total taxes imposed on data center-related entities in 2025 were approximately $61.1 million.

What is an Enterprise Zone and why abate taxes there?

Enterprise Zones are a program created by the State of Oregon and administered by cities, ports, counties, or tribal governments, known as Zone Sponsors. These zones incentivize business investments by abating all local property tax for a certain number of years.

An enterprise zone serves as a critical tool for local economic development efforts aimed at encouraging investment in traded sectors like advanced manufacturing, information technology, and food processing, while promoting job creation and strengthening the local economy.

Currently, there are 73 enterprise zones in Oregon : 55 rural and 18 urban. Local zone sponsors are responsible for applying for state designation, as well as creating, amending, managing, and seeking redesignation to maintain eligibility. All of the Zones must periodically renew their state eligibility. The statewide enterprise zone program is set to expire on June 30, 2032, while Hillsboro's enterprise zone is currently scheduled to expire on June 30, 2028.

Where is the Enterprise Zone in Hillsboro and when was it established?

Hillsboro established its Enterprise Zone program in 2006 and has two approved areas: North Industrial and Downtown & South Industrial.

The North Industrial Area was most recently amended in 2025 to include additional parts of the Jackson East Area which was planned for industrial development in 2020.

The program requirements for applicants of Hillsboro's Enterprise Zone, were last updated in 2017. Read the summary guidelines.

Do data centers that receive tax incentives pay other fees?

Yes. Data centers that receive tax incentives through the City of Hillsboro Enterprise Zone program pay additional fees including:

• A one-time Enterprise Zone Application Fee equal to 0.1% of the total estimated value of investment and capped at $50,000.
• An annual Community Service Fee based on the annual abated taxes relative to employment (jobs) created and retained at the site. Entities that provide more employment relative to the amount of tax abatement qualify for a lower or no Community Service Fee in that year. The maximum Community Service Fees are 33% of the abated property tax amount in years 1- 3 and 50% in years 4 - 5.
• A School Support Fee applied in years four and five of the exemption period in the amount of 15% of the abated tax. This fee is separate from the Enterprise Zone Community Service Fee and funding goes to the local school districts and the State School Fund.

All data centers, whether they are receiving tax abatements or not, also pay development application and permit fees, system development charges to support new infrastructure, and franchise utility fees for use of utility infrastructure.

Do data centers bring jobs & benefits to the community?

Data centers bring economic activity to the community and support a variety of short-term and long-term living-wage jobs including software engineers, computer scientists, cyber security professionals, electricians, and construction trades including builders, plumbers, electricians, and maintenance professionals.

In 2023, data centers in Oregon created 9,310 direct jobs and 38,380 indirect and induced jobs with more than $4.1 billion in labor income, according to PwC (2025).

Additionally, Community Service Fees paid by Enterprise Zone recipients help fund local workforce development and small business development activities, including:

These investments provide community members, especially those with greater economic prosperity needs, with resources, training, and career access support.