Data Center Tax Break May Be Extended in Washington State

Online, March 20, 2011 (Newswire.com) - By Lynne Lynch, Columbia Basin Herald staff writer

OLYMPIA - A bill to extend last year's tax exemption for rural data center construction was heard by the Senate Ways and Means Committee in Olympia.

Providing job growth and a boost to Grant County's tax base were some of the benefits highlighted during testimony Wednesday.

The deadline of the original bill is June 30, said Pat Boss, the Port of Quincy's government affairs director. It means companies wanting to start projects after that date won't benefit from the original bill.

The next step for the committee is to take action on the extension bill, which should happen in the next few days, he said.

There are companion bills in the Senate and the House.

The bill hasn't been heard in the House.

The bills are considered budget bills.

"These bills that have to do with the budget or tax exemptions could come up later in session," Boss said.

Boss testified on the port's behalf, detailing data center projects in Grant County.

There has been about $1.5 billion in new construction in Grant County since 2006, he said.
With two major data center projects in Grant County occurring recently with Microsoft and Yahoo!'s expansions, about 850 construction workers were hired.

There has been an expansion of a data center in Moses Lake and construction of a new data center is starting to occur in Quincy, he said.

The original tax exemption bill created more economic activity, and also helped the county, city, school district and hospital district by broadening the tax base.

Terry Tilton, of the Washington State Building and Construction Trades Council, also testified in favor of the bill. She pointed out there are more than 200,0000 worker hours completed on the projects.

Mark Minickiello, of the Northwest Credit Union Association, said he wanted the bill expanded to private nonprofit groups. He knows of some who might be able to take advantage of the bill.

Sabey Data Center Properties President John Sabey also testified in favor of the bill.
Sabey bought land in Quincy last year to build a data center.

"We knew some companies were poised to build if it became law," he commented.
From the projects built, between $1 billion to $2 billion was generated.

"Construction workers are now working in central Washington," Sabey said. "Construction unemployment in central Washington today is virtually zero."

Companies have been recruiting electrical workers from the Puget Sound counties to meet their needs.

He brought pictures and letters of support from employees working on the projects and their families.

More than 250,0000 square feet of projects are under construction, which doesn't count Sabey's Quincy project.

"It's exciting to be part of such a successful industry," Sabey said.

Although servers and electrical equipment are exempted from taxes, taxes are paid on the structure, infrastructure, water, sewer rods, heating, and employee office spaces, he said.
With the new projects, tens of millions of dollars annually are paid, helping to support state, local and school district budgets, he said.