Oregon tax law could trip up Google Fiber's Portland rollout

Oregon tax laws could derail Google (NASDAQ: GOOG) Fiber's deployment in Portland, potentially causing the company to pull out from a build it announced in February and taking hundreds of millions of investment dollars along with it, local officials fear.

The issue is complex, The Oregonian reported, revolving around Oregon's move from a local assessment of cable companies' networks to a central assessment. This steamrolled into a new tax formula that values companies' property based on their brand and other "intangible" assets. The law was challenged by Comcast (NASDAQ: CMCSA), which initially won a decision that the tax formula had been incorrectly applied and then lost it again when the Oregon Supreme Court reversed the decision. If Google is seen as a cable company, it would fall under these tax laws, which some lawmakers consider onerous--at least for Google.

If the tax issue comes up to bite Google in the leg, so to speak, it could cause the high-speed Internet provider to limp away, taking with it an anticipated $300 million from the city of Portland, along with similar amounts for the communities of Gresham, Tigard, Lake Oswego, Beaverton and Hillsboro.

The tax laws shouldn't be allowed to interfere with that, said Vince Porter, an economic policy adviser to Oregon Gov. John Kitzhaber.

"If we want to bring in additional competitors hopefully we'll have a system that wouldn't prevent them from making those investments," Porter told state lawmakers who are reportedly planning to address the tax issue during the next legislative session.

Right now, "there's no question Google Fiber would be subject to central assessment," Mike Dewey, executive director of the Oregon Cable Telecommunications Association, told the newspaper, also noting that Comcast's property tax bill in Oregon is "353 percent higher than its national average."

Google had no comment on the potential tax brouhaha.

For more:
- The Oregonian has this story

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