Pomps Tire Retreading & Remanufacturing — West Salem, Oregon Relocation

TAX
INCENTIVE
STACK

A comprehensive analysis of every federal, state, and local financial incentive applicable to the Pomps industrial relocation — combining three independent research sources with current 2025–2026 tax law including OBBBA corrections.

$5M+
10-year combined incentive potential
Year 1 Tax Savings $500K–$1.5M
E-Zone (3–5 yrs) $432K–$720K
Cost Seg Year 1 $300K–$740K
URA Grant Up to $200K
Energy Trust $50K–$300K
⚡ TIME SENSITIVE Enterprise Zone authorization MUST occur before investment begins  ·  WOTC expires December 31, 2025  ·  Section 179D construction deadline June 30, 2026  ·  URA grant must be approved before costs incurred  ·  OZ QOF investment must be within 180 days of gain  ·  Enterprise Zone authorization MUST occur before investment begins  ·  WOTC expires December 31, 2025  ·  Section 179D construction deadline June 30, 2026  ·  URA grant must be approved before costs incurred  ·  OZ QOF investment must be within 180 days of gain  · 
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At a Glance — Priority Stack
🔴 Urgent — Act Before Investment
$720K
Max 5-year value
Enterprise Zone Property Tax Abatement
Must authorize BEFORE construction or equipment orders
🔴 Urgent — Before Costs Incurred
$200K
Matching grant potential
West Salem URA Redevelopment Grant
Apply before incurring eligible construction costs
🔴 Expires Dec 31, 2025
$9,600
Per qualifying hire (veterans)
WOTC Hiring Tax Credits
Screen all new hires NOW — 28-day filing window
🔴 Construction Start Deadline
$350K
Example: 60k sq ft facility
Section 179D Energy Deduction
Construction must START before June 30, 2026
🟡 High Value — At Closing
$740K+
Year 1 federal tax savings (100% bonus)
Cost Segregation + 100% Bonus Depreciation
Commission study at acquisition closing
🟡 High Value — Before Equipment
$300K
Custom rebates up to 90% of project cost
Energy Trust of Oregon Industrial Rebates
Contact before finalizing equipment specs
🟢 Verify Parcel — 180-day Window
$5M+
Capital gains exclusion potential
Opportunity Zone / QOF Structure
Confirm census tract; 180-day QOF investment window
🟢 Verify Before Close
$600K
Lifetime interest savings vs conventional
SBA 504 + Oregon OBDF Financing Stack
Structure simultaneously with purchase agreement
🔵 Ongoing — Document From Day 1
$200K
Annually, dollar-for-dollar federal credit
R&D Tax Credits — Process Improvements
Retroactive look-back also available
01 · Oregon Enterprise Zone · Property Tax Abatement · High Probability

ENTERPRISE
ZONE

Oregon's Enterprise Zone program offers 3–5 years of 100% property tax exemption on new investments in buildings, equipment, and site improvements. West Salem is within a Salem-area urban Enterprise Zone administered by SEDCOR. Tire retreading/remanufacturing is squarely in the "traded-sector industrial" category that the program explicitly targets.

$720K
$8M property + $4M equipment
~1.2% effective tax rate
5-year extended exemption
Standard Term
3 years — 100% abatement on all qualified new plant and equipment
Extended Term
4–5 years — with additional hiring/wage commitments negotiated with Polk County and local school district fee (15–30% of savings in years 4–5)
What Qualifies
New buildings, facility expansion, industrial machinery, fixed production equipment, large site improvements. Minimum ~$50K investment.
Job Requirement
Relocating company (new to zone) must create at least 1 new job. All West Salem hires count.
Estimated Annual Savings
$75K–$145K/year depending on investment size and Polk County effective rate (must confirm with county assessor)
⚠ Critical Timing
Authorization MUST occur before construction begins or equipment is ordered. No retroactive qualification. Call SEDCOR at 503-588-6225 before signing the purchase agreement.
Contact
SEDCOR — 503-588-6225 · City of Salem Economic Development · sedcor.com/enterprise-zones
02 · West Salem Urban Renewal Area · TIF + Matching Grants · Moderate–High

URBAN
RENEWAL
GRANTS

The West Salem Urban Renewal Area (453 acres) is an active TIF district. It includes a West Salem Redevelopment Grant Program offering matching grants for industrial buildouts — building additions, new construction, and remodels that increase utility for manufacturing equipment. This is non-dilutive capital that most industrial buyers never access because they don't apply before starting work.

$200K
20% matching grant
Non-dilutive capital
Subject to program caps
Grant Type
Matching grant — typically 20% match required from applicant; grant covers remainder up to program cap
Eligible Uses
Building additions, new construction, remodels increasing manufacturing utility. Permanent improvements only — no demolition, no removable equipment.
TIF Infrastructure
Separate from grants — TIF increment can also fund roads, utilities, stormwater, and site remediation benefiting the property. Range: $50K–$1.5M depending on project scope.
Holding Requirement
Investment must remain in district for at least 10 years. Financial need must be demonstrated.
⚠ Critical Timing
Costs incurred before grant award are NOT eligible. Application must be approved before construction begins. Engage URA staff immediately after confirming parcel location.
Verify Parcel
Must confirm property falls within 453-acre URA boundary. Contact: Tory Banford — 503-540-2445 / tbanford@cityofsalem.net
03 · Cost Segregation Study · Federal Tax Engineering · Very High Applicability

COST
SEGREGATION

Engineering-based cost segregation separates building components into shorter-lived asset classes (5, 7, 15-year) instead of 39-year commercial property. For three industrial buildings, this is almost certainly the highest single-year tax reduction available — and it became dramatically more powerful on July 4, 2025.

$740K+
$6M facility · 33% reclassified
100% bonus dep. · 37% tax rate
Study cost: $4K–$15K
⚠ Important Correction from Source 3

One research source cited the 2025 bonus depreciation rate as 40%. This is incorrect. The One Big Beautiful Bill Act (P.L. 119-21, signed July 4, 2025) permanently restored 100% bonus depreciation for property placed in service after January 19, 2025. If any advisor is quoting 40%, they are working from pre-OBBBA law and Year 1 projections are significantly understated.

2024
60%
Pre-OBBBA (correct)
2025 (old law)
40%
This was the phasedown
2025 NOW (OBBBA)
100%
Permanent — no expiration
Typical Reclassification
25–40% of total building value moved to 5, 7, or 15-year property. Industrial/manufacturing facilities are best candidates (specialty electrical, process plumbing, HVAC, flooring, dock equipment).
Example Math
$6M facility · $2M reclassified at 100% bonus = $2M Year 1 deduction vs. $154K under straight-line. At 37% rate = $740K in tax savings pulled forward.
New QPP Provision
OBBBA created Qualified Production Property — manufacturing buildings may qualify for even broader immediate expensing. IRS guidance developing; engage specialist.
Retroactive Look-Back
If Pomps owns other facilities with no cost seg study, file Form 3115 to catch up all prior years in one deduction — no amended returns needed. Often generates $500K–$3M.
Study Cost / ROI
$4,000–$15,000 for study. Typical ROI: 20x–100x in Year 1. Use ASCSP-certified engineers: KBKG, Engineered Tax Services, Cherry Bekaert.
04 · IRC Section 179D · Energy Efficient Commercial Building Deduction · Deadline Critical

SECTION
179D
ENERGY

Section 179D allows a deduction per square foot for qualifying energy-efficient improvements to lighting, HVAC, and building envelope. Retreading operations are heat-intensive — an industrial HVAC redesign, LED conversion, and insulation upgrade can easily trigger 25%+ energy savings and the full enhanced deduction rate. But the clock is running.

$348K
At $5.81/sq ft (2025 rate)
Prevailing wage reqs apply
$1.00/sq ft without PWA
2025 Max Rate
$5.81 per sq ft (inflation-adjusted) with prevailing wage & apprenticeship requirements. $1.00/sq ft without.
Qualifying Systems
Interior lighting, HVAC & hot water systems, building envelope (insulation, roofing, windows). Must achieve ≥25% energy savings vs. ASHRAE 90.1 baseline.
Recurrence
Can be claimed every 3 years on the same building for additional qualifying improvements — not a one-time deduction.
⚠ HARD DEADLINE
Construction must BEGIN (not complete) before June 30, 2026 per OBBBA termination provision. Engage energy engineer now to design, bid, and mobilize before that date.
05 · SBA 504 + OBDF + Industrial Revenue Bonds · Financing Stack

FINANCING
STACK

Three programs stack together to dramatically reduce cost of capital on the acquisition and buildout. The SBA 504 + OBDF combination can put the majority of the project at fixed rates well below conventional industrial lending — with as little as 10% down.

$600K
SBA 504 on $5M project
~1.5–2% rate differential
20–25 year fixed term
SBA 504 Structure
50% bank (1st lien) · 40% SBA debenture at fixed rate · 10% equity. Oct. 2025 SBA rates: 5.77–5.93% fixed for 20–25 years. Max SBA portion: $5M (40% of $12.5M project).
OBDF Gap Financing
Oregon Business Development Fund: fixed rate = T-Bills + 1% (min 4% APR), up to $2M, 20-year max. Stacks with SBA 504 as subordinate gap piece. Pomps qualifies as traded-sector manufacturer.
Industrial Rev. Bonds
Tax-exempt bonds for qualifying industrial projects. 1–2% below conventional rates. Lifetime savings $500K–$2M. Requires county issuance & bond counsel. Start with Business Oregon.
Local CDC Contact
Northwest Business Development Association (NWBDA) — nwbusiness.org · CCD Business Development Corporation — ccdbusiness.org
06 · WOTC + Chemeketa Workforce Grants · Hiring Incentives · Expires Soon

HIRING
CREDITS

Two parallel programs reduce the effective cost of building out a West Salem workforce. WOTC is a federal dollar-for-dollar tax credit — and it expires at year-end. Chemeketa Community College's workforce programs can partially fund technical training for retreading technicians.

$9,600
Standard hire: $2,400
Disabled veteran: $9,600
Carry forward 20 years
WOTC Target Groups
Veterans (all categories), ex-felons, long-term unemployed, SNAP recipients, SSI recipients, TANF recipients, designated community residents. No cap on qualifying hires.
⚠ Expires Dec 31, 2025
Current authorization ends December 31, 2025. Form 8850 pre-screening must be completed on or before the day of job offer. File with Oregon Employment Dept within 28 days of hire start.
Oregon WOTC Contact
Oregon Employment Department WOTC Unit · 800-237-3710 press 3 · WOTC@employ.oregon.gov · 875 Union St. NE, Salem
Chemeketa Grants
Workforce development grants for industrial training: $2,000–$7,000 per employee. Apprenticeship subsidies, customized training programs. Contact Chemeketa Workforce Development, Salem campus.
07 · IRC Section 41 R&D Tax Credit · Highly Underutilized in Tire Industry

R&D TAX
CREDITS

The federal R&D credit is a dollar-for-dollar reduction in tax liability — not just a deduction. Almost no tire retreaders claim it, yet the four-part IRS qualification test is routinely met by standard retreading operations. The OBBBA also permanently restored immediate expensing of domestic R&E costs under new Section 174A.

$75K
On $500K engineering effort
Federal: ~10% + Oregon: ~5%
Retroactive look-back available
Qualifying Activities
Rubber compound formulation improvements · curing press cycle optimization · buffing/skiving automation · bonding process development · VOC-reduction engineering · quality inspection system innovation · non-standard tire profile development
Qualifying Costs
Wages of engineers & technicians on qualifying work · supplies consumed in research · 65% of contractor costs on qualifying activities
OBBBA Section 174A
R&E costs capitalized 2022–2024 can now be deducted entirely in 2025 or split over 2025–2026. Small businesses (<$31M receipts) may amend prior returns to recover costs already paid.
Retroactive Look-Back
Credits can be claimed retroactively via amended returns. If Pomps has never documented R&D activities, a specialist can recover multi-year credits. Free preliminary assessments available from Swanson Reed, KBKG, Acena Consulting.
08 · Energy Trust of Oregon · Industrial Cash Rebates · Before Equipment Purchase

ENERGY
TRUST
REBATES

Energy Trust is a nonprofit that administers utility ratepayer-funded efficiency programs. Industrial customers are the highest priority. For a heat-intensive retreading operation, the custom rebate programs are particularly powerful — and the technical studies are free.

$300K
Up to 90% of eligible project cost
$0.45/kWh electric savings
$5.00/therm gas savings
Custom Electric Rebates
$0.45 per kWh saved, up to 90% of eligible project cost. Industrial operations saving 500K+ kWh annually could receive $225K+ in rebates.
Custom Gas Rebates
$5.00 per therm saved, up to 90% of project cost. Curing ovens are extremely gas-intensive — heat recovery systems and efficient oven design can generate significant rebates.
Free Technical Studies
Up to $20,000 value at no cost — scoping studies, technical energy studies, installation guidance, and post-installation verification. Request before finalizing equipment.
Standard Equipment
Compressors, motors, VFDs, LED lighting, HVAC — all have standardized rebate schedules. Application must be filed within 90 days of equipment purchase.
Contact
existingbuildings@energytrust.org · 1-866-605-1676 · energytrust.org/industry
09 · Salem Electric — Member-Owned Cooperative · Overlooked Advantage

SALEM
ELECTRIC
CO-OP

Salem Electric is not just another utility — it's a member-owned nonprofit electric cooperative serving West Salem industrial land. That changes the economics for a large-load industrial user. With 500kW–2MW of connected load from curing presses, compressors, and ventilation, Pomps becomes a major customer to a small co-op, creating leverage that doesn't exist with investor-owned utilities.

$200K
Capital credit refunds
Negotiated rate savings
Infrastructure cost-sharing
Capital Credits
As a member-owner, Pomps accumulates equity in Salem Electric. Credits are periodically returned to members — for a large industrial user, tens of thousands over facility life.
Negotiable Infrastructure
Co-ops frequently cost-share or credit line extensions, transformer upgrades, and substation capacity for large new loads. Salem Electric may pay for infrastructure upgrades to attract 1–3MW of industrial load.
Rate Structure
Request the industrial/large-load rate schedule before closing. Co-ops often have favorable demand charge structures vs. investor-owned utilities on high-load-factor industrial operations.
Ask Before Closing
Service capacity at the parcel · Upgrade costs (who pays) · Industrial demand rate schedule · Load-based incentive programs. Contact: 503-362-3601 · 633 7th St NW, Salem
10 · Qualified Opportunity Zone · Capital Gains Strategy · Verify Parcel

OPPORTUNITY
ZONE

West Salem is confirmed as an Opportunity Zone area (Polk County has 2 designated OZ tracts, and West Salem is the most populated urban area in Polk County). If the specific parcel falls within an OZ census tract, investors with capital gains can roll them into a Qualified Opportunity Fund that owns or improves the property — with permanent tax elimination on 10+ year appreciation.

$5M+
Appreciation $3M → $6M
100% permanently tax-free
Federal + Oregon gain exclusion
OZ 1.0 Status
West Salem OZ area confirmed. Parcel-level verification required — use Salem's interactive OZ map viewer and census tract overlay. Polk County Tract 41053005100 confirmed OZ.
Key Benefits
Deferral of capital gains invested in QOF until Dec. 31, 2026 · 100% exclusion of post-investment appreciation if QOF held 10+ years · Oregon generally follows federal gain timing
QOF Structure
Pomps (operating entity) can lease from a QOF-owned property, or itself be a QOZ business. Must substantially improve property within 30 months (double adjusted basis excluding land).
OZ 2.0 Opportunity
New OZ designations begin July 1, 2026, effective Jan. 1, 2027. If parcel is NOT currently in OZ, coordinate with Salem Urban Development now to pursue OZ 2.0 nomination.
⚠ 180-Day Window
Capital gains must be invested in QOF within 180 days of realization. Formation and funding timeline is critical. Engage tax counsel immediately if investors have recent gains.
11 · Additional Strategies · Lesser-Known but High-Value

STRATEGIES
MOST CPAs MISS

Tangible Property — De Minimis Election
Elect to immediately expense items under $2,500/item ($5,000 with audited financials). Covers tools, fixtures, and small equipment — avoids capitalization of move-in costs. Often $100K–$500K additional deductions.
Partial Asset Disposition (PAD)
When replacing roof, HVAC, electrical panels, or dock equipment — write off remaining basis of the old component in the year of retirement. Typical deduction: $50K–$200K per major replacement. Must elect in year of disposition.
Routine Maintenance Safe Harbor
Recurring maintenance keeping property in ordinarily efficient operating condition is deductible (not capitalized) if expected more than once per 10-year period. Critical during early occupancy when phased improvements occur.
Oregon Property Tax Appeal
At acquisition, have an independent appraiser assess whether Polk County's assessed value reflects actual market value. Enterprise Zone abates NEW investment; existing assessed value is still on the tax roll and worth contesting.
No Oregon Sales Tax
Oregon has no state sales tax. On $5M of equipment: $400K–$500K in immediate structural savings vs. California or Washington. Automatic — no application required.
1031 Exchange (If Selling Prior Facility)
If Pomps sells its current owned facility, a 1031 exchange into the West Salem property defers all gain and depreciation recapture. Must use qualified intermediary; 45-day ID / 180-day close from sale.
Oregon Investment Advantage (OIA)
10-year state income tax exemption for certified businesses in eligible locations. Probably not applicable in Salem/Polk County (targets distressed rural counties) but worth a direct 15-minute confirmation call to Business Oregon.
RSIS Designation Check
Only 12 Regionally Significant Industrial Sites exist statewide. Unlikely to apply but a 5-minute call to City or Business Oregon closes the loop. If designated, there is state cost-sharing for site infrastructure.
Retreaded Tire Jobs Act (2025)
Reintroduced 2025 (LaHood/Sykes) with Goodyear support. If enacted: per-unit tax credit on retreaded tire purchases flowing to fleet customers, driving demand through retreader networks. Pomps should actively support passage through TRIB and local congressional delegation.
12
Priority Action Matrix
Priority
Incentive / Strategy
Timing / Deadline
Est. Value Range
🔴 URGENT
Enterprise Zone Authorization (SEDCOR)
Before ANY investment
$432K–$720K
🔴 URGENT
Phase I Environmental Assessment
Before purchase contract
Risk protection
🔴 URGENT
URA Redevelopment Grant Application
Before construction costs
Up to $200K
🔴 URGENT
WOTC Screening — All New Hires
Expires Dec 31, 2025
$2.4K–$9.6K/hire
🔴 URGENT
Section 179D — Begin Construction
Start before June 30, 2026
Up to $350K
🟡 HIGH VALUE
Cost Segregation Study (3 buildings)
At acquisition closing
$300K–$740K+ Yr 1
🟡 HIGH VALUE
SBA 504 + OBDF Financing Stack
Structure with purchase agreement
$200K–$600K lifetime
🟡 HIGH VALUE
Energy Trust — Industrial Assessment
Before equipment specs finalized
$50K–$300K rebates
🟡 HIGH VALUE
Salem Electric — Large Load Negotiation
Before closing
$50K–$200K+ life
🟢 VERIFY
Opportunity Zone — Parcel Confirm + QOF
180-day window from gain
$500K–$5M+
🟢 VERIFY
OZ + URA + E-Zone boundary maps
Single call to Salem Econ Dev
All three programs
🔵 ONGOING
R&D Tax Credits — Document from Day 1
Quarterly documentation
$55K–$200K/yr
🔵 ONGOING
Section 179 Equipment Expensing
Year of equipment purchase
Up to $2.5M
🔵 ONGOING
Tangible Property / PAD Elections
Coordinate with CPA at closing
$100K–$500K
🔵 WATCH
Retreaded Tire Jobs Act (2025)
Pending Congressional passage
Per-unit demand credit
The Single Most Important Structural Decision

OWN OR LEASE?

This one question changes the entire incentive stack. Several of the largest programs turn entirely on property ownership. Confirm the acquisition structure before any other planning proceeds.

IF POMPS BUYS
Enterprise Zone — full benefit on all investment
Cost Segregation — full benefit on building basis
1031 Exchange — defer gain from prior facility sale
OZ QOF structure — QOF owns property, Pomps leases from it
URA Redevelopment Grant — very likely eligible
Section 179D — building owner takes the deduction
SBA 504 — funds the acquisition directly
Year 1 potential: $500K–$1.5M+
IF POMPS LEASES
Enterprise Zone — depends on whether improvements are tenant's
Cost Segregation — generally not available (don't own building)
1031 Exchange — not applicable
OZ — complex; negotiate with landlord on QOF structuring
URA Grant — verify if tenant improvements qualify
Section 179D — negotiate allocation with landlord
SBA 7(a) for leasehold improvements instead of 504
Strategy shifts to equipment (Sec. 179, WOTC, Energy Trust, R&D)