Paradise tax corners for data centers in the USA

    High technology is an industry with a significant indicator of economic efficiency, and in many countries it is developing rapidly from year to year. Some companies are trying to find benefits during economic downturns, while others are waiting for green technologies to come to the forefront. Regardless of the chosen strategy, there is always a need to expand the territory for the construction of data centers.

    When choosing a construction site, you should pay attention to a number of factors, among which are real estate prices, weather and natural disasters, the level of staffing, and now another selection parameter has been added. To capitalize on the IT boom in construction, some states are introducing tax credits in the US as additional benefits for potential development. Some states today offer specific benefits for data centers, and among them there are especially “tasty” options. And although taxes are historically not the most important criterion for choosing a data center location, it is still worth paying attention to it.


    In recent years, Virginia has introduced several tax incentives and incentive financial programs to establish itself as the best location for data centers on the east coast. In particular, Ashburn, with its adjoining municipalities in Lauden County, has become a great location for data centers, partly due to the county’s proximity to Washington.

    In addition, Virginia has introduced a number of unique tax programs to make the state a leading hosting region. State laws exempt qualified data centers and hosting service providers from taxes on sales and rental of equipment, software, and other components related to the operation of data centers. In addition, Law 1133 allows local authorities to set even lower tax rates for data centers.


    Lonely Star State has one of the friendliest tax codes in the country, and this is especially evident in terms of benefits for data centers. Qualified data centers are exempt from taxes on private property and other “mandatory” payments associated with such activities. The standards by which data centers are recognized as qualified are described in Law 1223 . At the same time, if office equipment is not subject to the law, then IT equipment and power networks are affected.

    According to the laws of Texas, benefits are valid for one owner within a single site, the minimum size of which is 100 thousand square meters. ft., which basically means that any large site can accommodate many data centers that fall under tax breaks.


    As mentioned in the blog of the company ServerLIFT, Arizona is among the states, the tax laws which loyal to the data center. For example, Law 2488 reduced rates for the construction of data centers, the purchase of IT equipment and the associated energy costs. Further, Law 2009 introduces additional incentive programs for data center owners and tenants of “colocation” services.

    “The staff is very competitive in this regard,” said Sylvia Kahn, Vice President for Site Selection and Acquisition of CyrusOne Data Centers for the Phoenix Business Journal. “Arizona has a fairly flexible legal framework and is ideal for hosting data centers, because the state is a good player in the financial market. This position is very attractive for customers who are looking for construction sites in neighboring states, but choose us. ”


    Colorado also joined the list of states leading tax policy loyal to data centers. Law 1389 introduces incentives for the sale, storage and use of IT equipment for qualified data centers. The law covers equipment purchased for replacement and upgrade, as well as equipment that moves to Colorado from other places. It is proposed that the equipment can be used, stored or moved for 20 years from the date of sale.

    According to the articlein the Denver Business Journal, the bill is named one of this year's most important bills. “We are currently conducting many excellent projects that can give good results. For the industry, this is a signal that we are interested in development, ”said Sandra Hagen Solin, a spokeswoman for the Colorado Technology Association.

    Data centers are an important asset that can be cost-effective for each state. Since 2005, about 17 states have adopted tax incentives for data centers and, as the authors of the law have put it, “are actively attracting investment in this area.” The US Department of Economic Development said that data centers will qualify according to certain criteria:

    • the area of ​​buildings is more than 25 thousand square meters. ft;
    • capacities are located in one campus on one site;
    • data center construction started June 30, 2010 or later;
    • the total cost of investments in construction and equipment is not less than 15 million for a period of 2 years;
    • The total cost includes investments of capacity owners and all taxpayers whose IT equipment is located inside the site.

    The Office announced that it would provide an analysis and assessment of the economic benefits of introducing tax benefits until 2021 and every 6 years thereafter. Taxes - this is just one of many costs that affects the activities of data centers. Nevertheless, it is a rather heavy burden, and even a small difference can affect the decision on the place of future construction.

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