Sales tax breaks to lure data centres booming in Virginia
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RICHMOND, Va. — As Virginia has emerged as a top global market for data
Enacted a decade ago, sales and use tax exemptions for the large warehouses full of computers that function as the brains of the internet accounted for more than $65 million in uncollected state revenue last fiscal year, by far the biggest type of tax break the state offers.
Amazon, a major player in the data
Supporters say the incentives are a crucial reason for Virginia's success in the market and the industry is a major boost to the state's overall economy. Critics say the tax breaks are an unnecessary giveaway to a healthy industry that would still thrive in Virginia without them.
States are increasingly offering lucrative incentives to attract the data
Although Virginia forgoes sales and use tax revenues for certain large data
The Virginia Economic Development Partnership tracks companies eligible for the tax breaks but said it doesn't collect data on which companies actually take the credits and for how much. VDEP's records from January show all but one of the 25 data
Virginia has about 700 data processing, hosting and related establishments, but to be eligible for the state tax breaks on computers and related equipment, companies have to spend at least $150 million and meet certain hiring and salary thresholds.
"It's something we need to revisit," said Del. Chris Jones, a top Republican lawmaker and chairman of the state House Appropriations Committee.
The legislature's watchdog agency is examining the data
Buddy Rizer, the head of the Loudoun County's economic development office, said the state tax incentives have been crucial to the success of his county, the self-declared "home of the internet" where about 70
Rizer said the state risks a "real danger" of seeing the
"You will not be competitive without this to somewhat level the playing field," he said.
A report commissioned by the Northern Virginia Technology Council, an influential trade group that represents data
But Kasia Tarczynska, who analyzes the effectiveness of data
"The idea for tax incentives is to help start something that would not happen if not for that tax incentive," she said. "You don't need to support a healthy industry."