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Senate OKs tax break for server farms

Post by Jordan Schrader / The News Tribune on March 16, 2010 at 2:34 pm with No Comments »
March 17, 2010 9:43 am

The first floor vote came today for a proposed tax break for data centers that has been waiting in the wings.

The goal is to lure server farms to eastern Washington. A bill would allow technology companies to pay no sales tax when they build the centers in rural counties. All but seven counties are considered rural.

The Senate overwhelmingly approved the bill, 39-4.

Senators rejected amendments that would have allowed the tax break only for counties with higher-than-average unemployment.That would have added Pierce County, where work has started on a data center, and a couple of other urban counties and excluded some rural counties. (Here’s a map of the latest unemployment figures, out today. The state average is 9.5 percent.)

UPDATE:

Sen. Jim Kastama was disappointed by the vote.

Senators rejected Kastama’s amendment to drop the rural requirement and offer the tax break in counties with above-average unemployment. Pierce County’s unemployment stands at 11.3 percent, and Kastama told senators that Benaroya Cos. would not build its planned data center in South Hill if competitors in other counties win an advantage.

Supporters said the tax break has been well-worked and shouldn’t be messed with. It needs to be targeted toward the economy in one particular part of the state, said Republican Sen. Joe Zarelli, who opposed adding urban areas like his home of Clark County, one of the hardest-hit with a jobless rate of 14.8 percent.

Several data centers have located in central Washington. Sabey Corp. has announced plans to build a 525,000-square-foot data center in Quincy for at least one technology company yet to be named. That happens to be the size mentioned in the bill’s cost projections.

Says Kastama: “It sounds to me as if many people think this was kind of a fait accompli from the beginning – it was only going to be for that Sabey location.”

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