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CB Richard Ellis: Megawatts vs. Millions: The Role of Incentives in Data Center Location Decisions

North Carolina and Oklahoma are among roughly 12 states that offer data center-specific tax and incentive programs, according to a CB Richard Ellis (CBRE) study.

John Lenio, Economist and Managing Director, CBRE Economic Incentives Group, CB Richard Ellis (2/22/2011)

PDF: CBRE: Megawatts vs. Millions: The Role of Incentives in Data Center Location Decisions

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CBRE reports on the role of incentives in data center site selection in a recent report. Incentives are critical in the location decision, writes study author John Lenio. But taxes and incentives often enter the picture late in the decision process. Prime site selection factors for data centers, such as environment and weather and overall power costs, still come first.

But approximately 12 states have incentives just for data centers. North Carolina reduces sales taxes on equipment to 1 percent (down from the usual 5.75 percent) until 2015. And Oklahoma offers full sales tax exemption on equipment for qualified data centers. This exemption currently has no expiration.

States also use taxes to attract data centers. Full exemptions of certain taxes are offered by Kansas, Iowa, Illinois, Ohio, North Dakota, South Dakota, Minnesota, New York, New Jersey, and Delaware.

PDF: CBRE: Megawatts vs. Millions: The Role of Incentives in Data Center Location Decisions

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About the Author

John Lenio, Economist and Managing Director, CBRE Economic Incentives Group, CB Richard Ellis
John Lenio is Economist & Managing Director of CBRE’s Economic Incentives Group (EIG). EIG specializes in identifying, negotiating, and securing economic and tax incentives for CBRE’s corporate clients in the United States and Canada. Since 2004, EIG has secured incentive packages valued over $700 million for companies ranging from McKesson, US Bank, and Allstate to American Express, Healthways, and Verizon Wireless. Lenio has managed incentive engagements in all 50 states and 10 provinces in Canada.

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