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Alloftheseconsiderationsare leading
statesandmunicipalitiestoexpandtheir
abilitytoutilize incentivestoattractdata
centers,andagrowingnumberof
locationsaremakingspecificprovisions
formulti-tenantscenarios.
Typesof IncentivesAvailable
forDataCenters
Datacentertargeted incentivesare
relativelynew,duetotheperceived lack
of jobcreationand frequentdivisionof
jobcreationand investmentacross
multipleparties. Currently, 16statesoffer
datacenterspecificprogramsand
incentives. Mostprogramscenterontax
exemptionsorcredits, includingbusiness
personalpropertytax, salestaxeson
construction,equipmentrefresh,
electricity, realpropertytaxesand
investmenttaxcredits.
These incentivestypicallycover IT
equipment,aswellasotherthings like
mechanicalandelectricalequipment,
coolingsystems,power infrastructure,
electricityandbackup fuel. State
incentivebenefits fordatacenters
typicallyhaverequirementsrelatedto
capital investment,direct jobs,payrollor
salary,andtimeperiod.
Illinois,Missouriand Indianahaverecently
introduced legislationtocreatenew
incentives forthedatacenter industry.
Otherstatesthathavemadechangesto
their laws include:
•Virginia
–Becamethe firststateto
allowco-locationprojectstoqualify for
incentiveswhen itamended itsdata
center incentiveprogram legislation in
2012,allowingtenantsandownerstobe
qualifieddatacenterusers.
•SouthCarolina
– In2012,SouthCarolina
establishedasalestaxexemptionon
computerequipment, software,and
electricity forneworexistingdata
centersthat invest$50millionandcreate
25 jobs. Theexemption isalsoavailable
for“multipledatacentercompanies,” i.e.,
co-locationoperationsthat invest$75
millionandcreate25 jobs.
•Arizona
– In2013,Arizonapassed
legislationproviding for 10-to20-year
salestaxexemptions fordatacenter
equipmentandconstructionmaterials.
•Ohio
– Inmid-2013,Ohiopassed
legislationallowingco-locationcenters
toqualify forthestate’ssalestax
exemptionprogram.
•Texas
–LastSeptember, thestate
passed legislationtoexemptsalestaxon
powerandequipmentupto 15years.
ImpactandValue
Thedemand fornewdatacenters ison
therise: accordingtoa2012studybythe
Uptime Institute,over80%ofdatacenter
owners/operatorshavebuiltanewdata
centerorupgradedanexisting facility in
thepast fiveyears. Over50%ofdata
centerownerssaid futuredatacenter
budgetswillbegreaterdueto increased
computingdemandsandrisingcostsand
investmentstokeepdatacentersreliable,
secureanduptodate.
Whether it’sa large internetcompany,a
co-location facilityorasmalldatacenter,
datacenterstypicallyhavea
sophisticateddesignandengineering
needs,andare farmorecomplexthan
traditionalofficeoperations. Theyhave
theneedtomaximizespace forservers
andcomputerequipment,andrequire
state-of-the-artmechanicalsystems for
HVAC,A/Candbackuppower
generation.
Large internetcompaniesare investing
significantdollars indatacenters,andare
nowco-locating ITstaffandsalesstaff
withtheirdatacenters. Specifically,
Google invested$600millionandhired
200employees for itsCouncilBluffs,
Iowa, facility,andFacebook invested
$210milliontobuildthe firstphaseof its
newdatacenter inOregon. For large
companies, investing$200million in
computingequipment iscommon,with
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