The Iowa House has passed a bill designed to attract huge data centers to Iowa. Current law gives "web portal businesses" like Google a refund on the sales taxes the companies pay on computer purchases and electricity.
But as Representative Doris Kelley points out, to qualify for those tax breaks, the company had to buy or lease land in Iowa by December 31, 2008."In addition, the existing exemptions are specific to web search portal businesses," Kelley says, "and they would not necessarily cover all businesses, especially data center or Internet-related industries."
The bill which cleared the House this morning extends the same tax breaks to data centers, based on the amount of the investment. Businesses which invest at least $200 million over six years get a full sales tax exemption for computer purchases and electricity to run those computers and the building in which they’re housed. Data management firms which invest less than that still qualify for a partial sales tax refund.
Kelley, a Democrat from Waterloo, says Iowa is the only state which is considering these kinds of incentives.
"When we started this process, there were just five projects in the pipeline. Currently, we’ve got 11 projects in the pipeline with an estimate on the first five projects of 300 jobs," Kelley says. "Those salaries range from $40,000 to $70,000 — with an investment of approximately $1 billion in capital."
Kelley uses the word "progressive" to describe the proposal.
"This piece of legislation creates jobs which should be this legislative body’s focus," Kelley says. "Creating jobs is so important in this economy."
Listen to today’s detailed discussion of the proposal by clicking on the audio link below.