How could enterprise data centers help Kentucky?
America’s networks and data centers enable all that we do online today. Enterprise data centers create tech jobs, boost the local economy, and support a better online community everywhere.
But Kentucky needs a sales tax exemption to attract enterprise data centers
For nearly a decade, no enterprise data center has located in a state that imposes sales tax burdens on data center equipment—Kentucky is one of them.
Kentucky currently has a limited sales tax refund program for data center equipment, but this program has not been competitive with the 30+ states that simply exempt data center equipment from sales and use taxes. Kentucky should consider legislation like HB 202 to compete for enterprise data centers.
A data center sales tax exemption, like that proposed in HB 202, would make Kentucky competitive for data center investments
Kentucky can bolster its competitive business climate by joining 30+ other states that provide qualified data centers long-term certainty through a sales tax exemption on data center equipment, and position the state to attract new hyperscale data center investments.
Learn more about the benefits of hyperscale data center investments in Kentucky and the importance of passing a competitive sales and use tax exemption.
An enterprise data center is typically a $750 million dollar investment, larger than smaller co-location data centers. This kind of investment can drive:
- 1,200 construction jobs
- $500 million to the local economy during construction
Once built, each site generates
- 100 direct employees
- support for 300 additional jobs in security and maintenance
- almost $200 million dollars in local economic activity once operation begins
Learn more about the potential impact of enterprise data centers on jobs and communities nationwide through a 2017 report by the US Chamber of Commerce here.
Watch a video of Facebook’s newest data center in Henrico, Virginia— about the size of an aircraft carrier here.
An enterprise data center could create almost 20 million dollars in annual revenue for the state and localities 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 tax revenue new enterprise data centers could bring through 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.