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US States Compete For Data Centres

by Mike Godfrey, Tax-News.com, Washington

04 May 2010


To attract tech companies building server farms, Governor of Washington State, Christine Gregoire has enacted new tax incentives that will encourage companies to build data centers in rural areas of the state.

Last year, the state rejected a proposed tax break, which prompted Microsoft to move its cloud computing platform Azure out of Washington State to another data center in the US. The news was distressing to the town of Quincy, where Yahoo, Microsoft and Intuit have built large server farms, drawn to Grant County's cheap and green hydropower.

Since then, Facebook and Amazon.com have both chosen to build data centers in Oregon instead of Washington.

The new tax exemption, introduced by Gregoire, applies to:

  • Sales of server equipment that will be installed in a data center;
  • Labor and service charges for installing servers, and to sales of power infrastructure equipment;
  • Sales of power infrastructure; and
  • Labor and services for construction of power infrastructure.

To be eligible for the break, data centers have to be at least 100,000 square feet, and construction must begin between March 31, 2010, and July 1, 2011.

Commenting on the move, Patrick Boss, Director of Economic & Business Development for the Port of Quincy, said:

"The legislative activity has definitely stimulated interest... we've already had a couple of companies inquiring about building data centers in Quincy. We're excited about being on a level playing field again with other states such as Oregon."

Since the announcement of the incentives, Sabey Corporation has announced plans for the creation of a 525,000-square-foot data center in Quincy for at least one technology company yet to be named.

TAGS: tax | business | tax incentives | commerce | internet | e-commerce | United States | tax breaks

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