Iowa tailors taxes to entice Google

analysis
Jun 19, 20072 mins

Hawkeye State offers tax breaks in hopes of reaping long-term benefits from 2,000-acre server farm

Hawkeye State offers tax breaks in hopes of reaping long-term benefits from 2,000-acre server farm

Lured by special incentives, Google has announced plans to open a new $600 million data center in Council Bluffs, Iowa, according to reports. Whether it will be as green as the partially solar-powered Googleplex remains to be seen.

Google will use an existing building on a 55-acre plot of lands in the Council Bluffs; the server farmer could swell to cover 2,000 acres.

Iowa dangled some legislative carrots as incentive for the search behemoth to open shop in Iowa. According to reports, Iowa legislators have decided not to charge sales taxes on the utility bills for server farms, which will spell savings for Google, given the ever-increasing costs of running not only server hardware by the HVAC to keep the cool. Iowa is also waiving taxes on all computers Google will purchase.

Further, Google will reap a property tax break through 2024, according to reports, but it will plunk down about $65 million in property taxes over the next 15 years. Further, Google is expected to pay around $6 million in sales tax for building materials, state officials estimate.

Google will bring about 200 jobs to Iowa with an average salary of $50,000 to $60,000, according to different reports.

The Iowa data center will be situated newly expanded MidAmerican Energy electric-generating station. The expansion has increased the electric station’s reliability and capacity to 790 megawatts, another reason Google picked the Corn State as the new home for its server farm.