Missouri business leaders support development of data center tax incentives in the state

DataCenterKnowledge wrote on the Politics in data centers in NY, TX, and MO.

The Politics of Data Centers: NY, Texas, Missouri

January 6th, 2010 : Rich Miller

In recent years we’ve seen data centers become embroiled in state politics on topics such as whether to build new state data centers to manage citizens’ tax and benefit issues, where to put those data centers, who to hire to operate them, and whether to offer tax incentives to establish a state as a destination for development. This week we’ve data center make headlines in several states.

Missouri caught my attention as I have been there a few times meeting with business leaders.  Rich Miller goes on regarding Missouri.

Missouri: The state General Assembly in Missouri hopes to consider targeted tax incentives that will help the state attract more data center projects. Business groups, including the Missouri Coalition for Data Centers, hope to build upon a cluster of enterprise disaster recovery data centers in the Kansas City, and boost interest in the development of the state’s abundant supply of limestone caves as data center facilities. Missouri is home to several existing underground data bunkers, including The Mountain Complex near Branson and the Springnet Underground in Springfield.

The Missourinet article referenced by Rich has good points.

Business leaders put data center incentives on legislative wish list



Among the many issues to be entertained during the 2010 session of the General Assembly, which begins on Wednesday at the State Capitol in Jefferson City, is one that would offer incentives in a bid to lure data centers to Missouri. The push for the legislation comes from what is known as the Missouri Coalition for Data Centers, which is made up of businesses and local economic development agencies.

The argument is to classify data centers as information factories.

“A data center, basically, is a warehouse for information storage,” said Tracy King, Director of Taxation and Fiscal Affairs with the Missouri Chamber of Commerce and Industry, a member of the Coalition. “You can kind of look at a data center as a manufacturer. Instead of manufacturing widgets data centers manufacture bits.”

Why is designation as a manufacturer important? The manufacturing industry can already take advantage of state-sponsored incentives.

“We’re offering those same exact incentives to the manufacturing industry right now,” said Ora Reynolds, President of Hunt Midwest Enterprises in Kansas City. “So, if you’re manufacturing widgets you get these incentives. If you’re manufacturing data you don’t. So, this is basically the same incentives that are already out there for an industry that’s been in the state for years and years and now we’re trying to bring a new industry in with similar incentives.”

Why do this, because the rest of the surrounding states do which is why they have attracted the big data center companies.

“Tax incentives at every one of our surrounding states are already in place,” said King. “For, let’s say a 100,000 square foot data center, they’re handicapped by about $15-million to do business in Missouri. So they’re not doing business in Missouri – they’re doing business in Nebraska, Iowa, Kansas, Oklahoma – who already have both tax exemptions in place and also some personal property tax exemptions or abatements.”

Besides the Tax Director and business leaders, there is support in the House and Senate.

Sponsors of data center incentives legislation have been found in both the House and Senate. Supporters acknowledge the proposal might face challenges during these tough budget times, but they insist that at the end of the day the state would benefit from such legislation.

You can bet soon after Missouri extends manufacturing status to data centers, there will be an increase in data center activity in Missouri.