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Why It Matters
A lawsuit filed in Washington County could force seven major tech companies to pay property taxes on large data center expansions — taxes that supporters of the legal action argue were improperly waived in a rush to lock in benefits before a state-imposed pause took effect. At stake is not just local revenue, but the financial health of school districts across Oregon that rely on property tax collections.
A separate Oregon Emergency Board action earlier this year highlighted how thin the state’s budget cushion already is, making the estimated cost of these tax abatements particularly significant for local governments and public schools.
What Happened
Plaintiffs filed suit Tuesday in Washington County Circuit Court, targeting Washington County, the county assessor, the city of Hillsboro, Hillsboro’s economic director and city manager, and seven tech companies. Named firms include Adobe, Nvidia, Dropbox, and NTT.
The plaintiffs — a coalition that includes the Oregon Education Association, land-use group 1000 Friends of Oregon, Hillsboro City Councilor Kipperlyn Sinclair, State Rep. Tammy Carpenter (D-Beaverton), Tax Fairness Oregon, and advocate Jody Wiser — argue that 17 Standard Enterprise Zone applications approved by the city and county in March and April were improperly granted just before a new state law took effect.
Oregon lawmakers approved a one-year pause on the Standard Enterprise Zone program, and that suspension took effect June 6. The plaintiffs contend the approvals rushed through in the preceding weeks should not be allowed to stand.
The Tax Breaks in Question
The Standard Enterprise Zone program ordinarily allows five years of property tax waivers for new or expanded industrial development. However, some of the deals approved in Hillsboro go far beyond that baseline, with certain arrangements offering up to 25 years of property tax relief.
One NTT application alone bundled five separate data center incentive agreements, with terms structured so the company would owe no property taxes on expansion portions of its facilities until 2051 — a span of more than two decades.
Hillsboro already holds one of the highest concentrations of data centers in Oregon, and the city’s own enabling statutes for executing the enterprise zone program are set to expire in 2027. The state program itself is scheduled for renewal consideration in 2032.
By the Numbers
- 17 Standard Enterprise Zone applications approved by Hillsboro and Washington County in March and April 2026
- $90 million in Standard Enterprise Zone tax breaks received by tech companies in Washington County in 2025 alone
- 25 years of property tax waivers offered under some of the challenged agreements
- 2051 — the year NTT would resume paying property taxes on certain expansion areas under its deal
- $275 million lost by 191 Oregon school districts and education service districts to property tax abatements in 2024, according to a Good Jobs First report
What Both Sides Are Saying
Wiser, one of the named plaintiffs, framed the issue in blunt terms regarding the county’s lost revenue. “They owe my county a bunch of money. You can’t go back,” she said publicly about the companies that received the incentives.
Hillsboro’s city manager office pushed back, arguing through a spokesperson that the city acted within its legal authority. Patrick Preston, representing the city manager, said “while the legislature could have provided local governments with the authority to reject applications during this period, it didn’t do so” — suggesting city officials believe their approvals were legally proper given the absence of explicit legislative restrictions at the time.
Zoom Out
The dispute reflects a broader tension in Oregon and across the Mountain West over industrial tax incentive programs. Data centers are power- and water-intensive facilities, and communities hosting them increasingly question whether the economic benefits justify the strain on infrastructure and the tax revenue diverted away from public services. Two other programs — the Strategic Investment Program and the Long-Term Rural Enterprise Zone, which allows up to 15 years of property tax avoidance — remain active and could face similar scrutiny as lawmakers and local advocates weigh their costs.
Oregon’s public school system has faced mounting budget pressure, and the $275 million figure attributed to property tax abatements underscores why the teachers union has a direct financial stake in the outcome of this case.
What’s Next
The case will proceed through Washington County Circuit Court. If the plaintiffs prevail, the tech companies named in the suit could be required to resume property tax payments on the expansion projects covered by the challenged agreements. The outcome may also influence how Oregon’s legislature approaches renewal of the Standard Enterprise Zone program ahead of its 2032 expiration date.
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