North Carolina Extends Tax Breaks To Data Centers
The North Carolina State Governor, Pat McCrory, recently signed an economic development bill that offers tax breaks to data center companies in the state.
The legislation broadened the definition to include multi-tenant data centers. The bill lowered the minimum investment commitment data centers have to make to qualify for tax incentives from $150 million to $75 million. Tax break are one of the most important factors companies consider in their data center site selection process along with power rates, multiple high-speed fiber providers, natural disaster history and workforce. By lowering the investment threshold to $75 million, North Carolina allows investment by all data center tenants in a single data center to be “combined” to meet the minimum. This combination of investment factor allows smaller data center tenants to benefit from the tax breaks.
The bill exempts qualifying companies from the 7 -percent sales tax on power purchases which can offer substantial savings to data center companies of various sizes. Also, a sales tax exemption for property and equipment purchase is available to data center companies offering additional and substantial benefits.
North Carolina has gained a number of huge data center investments over the past 5 years by companies such as Google, Apple, Facebook, American Express, Bed Bath & Beyond and Disney among others. The new incentives will broaden the field of companies that benefit and create more demand in the multi-tenant data center arena in North Carolina.