Nicholas Miller

These tax incentives are a sort of broad term, and it covers a lot of different sort of favorable tax treatments that states are offering to data centers.

So sales and use tax in 37 states.

Then in at least 11 states, that sales tax exemption actually extends to the electricity as well.

I think that's becoming a hotter topic about data centers in general.

Then in five states, we also see some sort of a property tax abatement.

And those can be a little more complicated.

But in general, it's going to be a partial property tax abatement.

So no state is completely forgiving the property taxes that these data centers would play.

And we know from a few states that have evaluated those incentives that they can add up to be quite a lot of money.

So in Virginia, in fiscal year 2023, it was about $980 million in tax incentives awarded to data centers.

The upfront incentives, that incentive for the computers and some states offer incentives for the construction of the data center as well.

so you're not going to pay a sales tax on even the concrete for the walls of the data center.

I think that electricity exemption is pretty important as well because once these data centers are operational, they have really tremendous energy needs.

In terms of the states that are going the hardest, it varies from state to state the exact makeup of the incentive.

I think we know the most data centers are in Virginia, Texas, and California.

But in some of the states maybe where there was not so much data center construction previously, they're leaning more into different strategies.

So we've seen in Mississippi, the state is actually investing grants in workforce training to upskill local residents to work at the data centers even.

So beyond just tax incentives, I think some of the states that were not previously these data center destinations are looking to get in on the action.

I think one of the big goals of these incentives are jobs.

We see that very often that these data centers will hopefully bring jobs to local communities.