Gov. Jay Nixon approved legislation late last week aimed at making Missouri more competitive to new and expanding data storage center operations.
The legislation provides exemptions from certain state and local sales taxes, including taxes on equipment, utilities and machinery, as part of an effort to bring high-tech companies and jobs to the state. A similar bill that Nixon vetoed last year had raised concerns that the exemptions proposed then were too broad and did too little to guarantee the state would see a return on its investment.
“It’s a more fiscally responsible law,” said David Orwick, an attorney familiar with data center real estate and construction, in a report by Data Center Knowledge.
According to the report, the new incentives require operators to invest $25 million and create 10 jobs for new data centers, and invest $5 million and create five new jobs for expansions. The measures specifies that the jobs must pay 150 percent more than the county average wage to qualify.
Missouri Chamber of Commerce President and CEO Dan Mehan called the legislation a “game changer.”
“We think the new data center tax laws passed in Missouri will help drive more business and job growth in the state,” said Brad Hokamp, chief executive of Cosentry, which operates data centers and manages an array of cloud computing services in Missouri, Nebraska and Kansas. “More importantly, the new laws will also benefit our end customers who are considering utilizing our multitenant data centers in St. Louis and Kansas City, as the cost to build will be lower,” Hokamp said in the Data Center Knowledge report.
Taxes are just part of the equation to attract operators to Missouri, which claims to offer good connectivity, favorable climate, lower average utility costs and an abundance of underground sites. Orwick argued, “When you count vendors coming in to service” data center facilities and those who locate nearby, “the ripple effect is huge.”