In race to attract data centers, states forfeit millions in tax revenue to tech companies

Tax Incentives and Economic Impact - 16 states have provided nearly $6 billion in data center tax breaks over the past 5 years [2] - Virginia recoups approximately 48 cents for every dollar it foregoes in sales tax from data centers [7] - A Microsoft data center in Illinois received over $38 million in tax breaks but created only 20 permanent jobs [4] Job Creation and Industry Comparison - Data centers may not create the same permanent job threshold as other industries like the auto industry [15] - A 250,000 square foot data center might have only 50 permanent jobs, half of which are contract positions [15] - Construction jobs are a significant but temporary benefit of data center projects [7][14] Concerns and Re-evaluation - There are growing calls to re-examine whether data center tax breaks should remain in place [11] - Concerns exist that data centers' immense power demand could impact states' carbon neutrality goals and drive up power costs for customers [11][12] - Local pushback against data centers is increasing due to their rapid expansion [10] Big Tech Perspective - Microsoft, Google, Meta, and Amazon state they follow all disclosure requirements on incentives and work with local communities [8] - Big tech companies argue that data centers generate tremendous income during construction and build an ecosystem of contractors [6]