How could enterprise data centers help Michigan?
Watch and share our video, and learn how Michigan could attract an enterprise data center.
America’s networks and data centers enable all we’re doing online today. In fact, LoudounNow reported in September 2020 how data centers in Loudoun, Virginia have growing demand during the coronavirus pandemic:
“Loudoun’s data centers, already a fast-growing market, have seen a surge of demand as society has scrambled to replace in-person activities with virtual alternatives. Long an important part of the county government’s budget, they have also been a bright spot as other sources of local tax revenues have fallen.”
In October 2020, Washington Business Journal also reported how the very same county with data centers had “jaw-dropping numbers [and] Loudoun’s data center tax revenue could top real estate taxes in just a few years”
Over the last seven years, no enterprise data center has located in states that impose sales tax burdens on data center equipment.
Currently, the Michigan legislature is proposing the bill HB 5128. This bill exempts data center equipment from Michigan sales tax if that equipment were part of an enterprise new data center that:
- invests at least $250 million in Michigan
- creates at least 30 new full-time jobs at 120% of the local county average wage
27 states exempt data center equipment from sales and use taxes. Michigan is considering legislation to compete for enterprise data centers.
An enterprise data center is typically a $750 million investment, much larger than smaller co-location data centers. This investment drives:
Once built, each site generates
- 100 direct employees
- support for 300 additional jobs in security and maintenance
- almost $200 million annually in local economic activity
Learn more about the potential impact of enterprise data centers in Michigan in a 2020 report by Mangum Economics here.
Watch a video of Facebook’s newest data center in Henrico, Virginia— about the size of an aircraft carrier here.
According to a 2020 report by Mangum Economics, an enterprise data center could create almost $20 million in annual tax revenue for your local county due to:
- Income taxes paid by employees and contractors
- Corporate income taxes from data center operators & contractors
- Sales taxes on non-exempt equipment and supplies
- Lodging taxes for visits by contractors and workers
- Sales taxes on business services
- Local real estate & personal property taxes
Read more about that about the potential economic benefits and tax revenue that new enterprise data centers could bring to Michigan in a 2020 report by Mangum Economics here.
Enterprise data centers connect to high-capacity networks by building network infrastructure that can be used by schools, colleges, health institutions, and more.
- In North Carolina and New Mexico, like in other states, Facebook brought high-speed internet to five counties in a new internet fiber route
- Microsoft’s Airband Initiative brings high-speed internet to rural America, partnering with multiple broadband service companies for the effort
To learn more about the benefits of enterprise data centers on American economies, we’ve compiled a list of reports quantifying the variety of economic and tax benefits enterprise data centers provide.
In September 2020, LoudounNow reported how “Amid Pandemic, Data Center Alley Going Strong.”
- “Loudoun’s data centers, already a fast-growing market, have seen a surge of demand as society has scrambled to replace in-person activities with virtual alternatives. Long an important part of the county government’s budget, they have also been a bright spot as other sources of local tax revenues have fallen.”
In October 2020, Washington Business Journal reported how “Jaw-dropping numbers: Loudoun’s data center tax revenue could top real estate taxes in just a few years”
- “We write often about the fiscal impact data centers have had on Loudoun’s budget, allowing the county to consistently reduce its real estate tax rate even as its population continues to soar — and demands for county services rise.”
The US Chamber of Commerce published a report on the economic opportunities generated by data centers nationwide.
Read more about the economic and tax benefits in particular states:
- The impact on Virginia
- The incentives for Virginia’s legislature
- The potential impact for Michigan
- The potential impact for Maryland
- The potential impact for Pennsylvania
- The impact on Illinois
Read about the overall economic impact of enterprise data centers from the companies themselves:
Enterprise data centers made $60 billion in capital investments in the US in 2019 alone, leading all other industries, according to the Progressive Policy Institute.