Nicholas Miller

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.

And I think evaluations of these incentives have found that yes, they do create jobs, but mostly at the beginning when the data center is being constructed.

There are a lot of construction workers, a lot of contractors, and then once the data centers are actually operational,

It is fewer people who are working there, often on the order of 20 or 50.

And then capital is another big component of that.

These data centers can cost hundreds of millions or billions of dollars.

And I think states want that to sort of come to their communities.

And especially when the data centers are being built, oftentimes they are hiring local firms.