The Arizona House of Representatives approved a bill last week that would expand a $5 million sales tax credit it passed last year to include corporate international operations centers that make a capital investment of $1.25 billion or more in the state. Just in time for Apple and its recently announced data center, which will likely qualify for the incentive.
Apple said in February that it would invest $2 billion in the new data center that will become its “global command center”. The Mesa, Az., site was formerly home to Apple supplier GT Advanced Technologies, which went bankrupt after a snafu over supplying iPhone 6 display covers.
The Arizona House passed the bill overwhelmingly by a vote of 57-3, and amended its version to match the original state senate version (Senate Bill 1468). The bill was sponsored by Sen. Bob Worsley (R), who represents the district where Apple plans on opening the new facility. Now the bill awaits approval by the state’s governor, Doug Ducey.
The sales tax credit can be earned if Apple invests at least $100 million in renewable energy facilities and, in turn, uses a portion of the energy generated to power the new data center; the tech giant has already promised the new facility would be run entirely on renewable energy. Apple also recently reached a 25-year agreement to buy up to 130 megawatts of solar power from a renewable energy project in Monterey County, Calif.
“The bill…also exempts Apple’s facility from sales taxes on electricity or natural gas, resulting in a $1.3 million loss of revenue for the state’s general fund for the budget year starting July 1, 2016, according to the Legislature’s budget analysts,” the AP reported.
Part of the Arizona allure for Apple was the rather generous tax incentives already enacted by the state’s government in 2013, which provides qualifying companies certain tax exemptions for up to 10 years. The state is also considering expanding these tax benefits for up to 20 years to attract more data centers, such as recent rumors around a new Microsoft facility in the Phoenix area.
“Microsoft has said the changes and a favorable tax climate would help,” said Arizona state senator Jeff Dial when speaking about a possible new data center in his state. He recently told the Phoenix Business Journal that Microsoft is one of the companies lobbying for changes to the 2013 tax incentives.