How Can Enterprise Data Centers Help Wisconsin?￼
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.
In fact, a new Mangum Economics study demonstrates the economic benefits of constructing new data centers in Wisconsin, both directly and in ripple effects that generate benefits statewide.
If just one new hyperscale data center were to locate in Wisconsin, the state could see $270 million in new economic output during construction, and $87 million annually.
And the indirect economic activity associated with a new data center in Wisconsin could lead to $1.6 million in tax revenue collected by the state of Wisconsin and $1.4 million collected by local governments each year.
“Between 2001 and 2020 the average annual pay for data center employees in the United States increased almost twice as fast as for the average private-sector employee in Wisconsin and in the nation.”Mangum Economics Study, 2022
Research has shown that data centers share the pool for high-tech labor with industries such as architecture, engineering, computer system design, software, telecommunications, scientific research & development, and technical consulting. The existence of a vibrant data center market helps to attract talent that supports all of these vital industries.
Over the last seven years, no enterprise data center has located in states that impose sales tax burdens on data center equipment.
Wisconsin is one of a minority of states that do not offer a sales and use tax exemption to encourage data center development. However, 27 states simply exempt data center equipment from sales and use taxes, without requiring refunds or imposing caps. Wisconsin should consider legislation to be more competitive in attracting future enterprise data centers
An enterprise data center is typically a $750 million dollar investment, larger than smaller co-location data centers. It drives:
- 1200 construction jobs
- $500 million through 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 creates annual revenue for your state and local governments from:
- 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.
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.