Trend Watch: Idaho Lawmaker Looks to Slash Data Center Tax Breaks

The Idaho legislature wants to limit the amount of tax breaks available to data centers. This location is a burgeoning location for data center development.

Data Center Knowledge

February 1, 2023

2 Min Read
The city of Boise, Idaho pinned on a map of the U.S.
Dmitry Kaminsky / Alamy

A lawmaker in Idaho recently introduced legislation to close a double tax incentive for data centers, according to reporting by CBS2 Idaho News.

State and local governments across the U.S. are taking a closer look at the incentives they extend to data centers to locate in their areas. The most legislative activity appears to be coming from the state with the highest density of data centers in the world: Virginia.

Our recent reporting revealed four proposed laws affecting data center growth in Virginia, specifically in Data Center Alley in the state’s Loudoun County.

Proposed Data Center Legislation in Virginia

Proposed Data Center Legislation Virginia

Unlike Virginia, Idaho’s proposed legislation doesn’t center on the commissioning of environmental studies, utility management, or data center site studies. Idaho State representative John Gannon is targeting the money data centers save through tax incentives.

While Meta, Facebook’s parent company, has paused all data center development as it reorganizes its strategy around AI, but when they were in full data center development mode, they announced a data center development in Kuna, Idaho. This move revealed a two-part tax incentive that would divert tax funds away from municipal uses and towards the enhancement of Meta’s financial position in the state.

Here’s how:

  1. Equipment tax exemption: In Idaho, data centers are exempt from paying taxes on equipment, based on the law HB 521, which was passed in 2020.

  2. Property taxes to benefit data center infrastructure: By choosing the urban renewal district of Kuna as the site for development, Facebook rakes in another data center incentive. Any property taxes Meta pays will funnel right back into developing the infrastructure the firm needs to stand up its data center campus.

Related:Meta To Build First Data Center in Idaho

The second benefit would reduce infrastructure buildout costs for the undeveloped area Meta chose for its development.

Rep. Gannon’s bill limits the tax benefits so that data centers must choose one or the other, not both.

For its part, Meta did place $8.2 million into Kuna’s general fund to pay for police and fire services for its development area, according to BoiseDev.

Subscribe to the Data Center Knowledge Newsletter
Get analysis and expert insight on the latest in data center business and technology delivered to your inbox daily.

You May Also Like