This is an update to a post I wrote post about how Washington County was considering giving considerable tax breaks to Intel.

Well, the tax proposals have been voted on and approved by Washington County commissioners and the Hillsboro city councilors. The following is an excerpt from a story in the Beaverton Times.

Washington County commissioners and Hillsboro city councilors unanimously approved Tuesday a $579 million tax break for the countyís largest employer, Intel Corporation, a manufacturer of computer microprocessor chips and wireless technology.

Intel will save on taxes it would pay on its manufacturing equipment, which it replaces every few years. The $579 million tax break calculation is the total of 15 years worth of expected equipment purchases by the company.

Intelís land and buildings will still be taxed by the county and city at their full rate.

In exchange for the savings it expects on its equipment purchases, Intel is guaranteeing a total of $29.3 million to the county, which will be paid partly each year, starting this year. The county is also likely to receive another $86 million in taxes and fees which will be triggered once the company begins buying new equipment.

The agreement guarantees the company will remain in Washington County, county officials said.

ìI completely believe in my soul those investments would not be made if we donít take advantage of this tax structure,î said Tom Brian, chairman of the county commissioners board.

A state program called the Strategic Investment Program, set up by the state legislature in 1993, allows local governments to negotiate alternative taxing agreements with companies who invest at least $100 million in their business.

Since the programís inception, Intel has signed three such alternative taxing agreements with the county and city of Hillsboro. The agreement approved this week extends Intelís tax break until 2028.

According to the agreement, Intel will pay property taxes only on the first $100 million worth of equipment bought in the agreementís 15-year time period.

Intel expects to spend $23 billion in equipment purchases in that time frame.

In my original post I wrote that Washington County shouldn’t give away the bank just to keep Intel around. On second thought I believe the deal that was made with Intel will benefit everyone, if Intel keeps its end of the bargain.

On a somewhat related note: There have been rumors floating around that Apple was going to switch from buying chips from IBM and Freescale Semiconductor to buying chips from Intel.

While I want to see Intel do well, both for Intel’s benefit for the benefit of the citizens of Washington County, the rumors are still just rumors and the probability of Apple using Intel chips is slim.

Forbes has the story.