Washington State governor Christine Gregoire’s signature is the final step a set of tax breaks for data center operators needs to go through to become state law.

Both chambers of the state legislature passed the bill last week. If the governor signs it, the bill’s supporters expect the new laws to make Washington more competitive in the race by many states to attract data center construction projects.

The bill lists Oregon, Arizona, North and South Carolina, North Dakota, Iowa, Virginia, Texas and Illinois as examples of some of the more aggressive competitors.

“Unprecedented incentives are available as a result of the desire of these states to attract investments that will serve as a catalyst for additional clusters of economic activity,” the bill reads.

If passed, the bill will exempt certain data center operators and tenants from sales tax on servers and installation labor cost. The same exemption will apply to power-infrastructure equipment.

Far from all new data center construction projects can qualify for the tax breaks, which are meant to attract larger builds.

An eligible data center has to have at least 20,000 sq ft of net data center space. Construction on the project will have to have started after between March 2010 and July 2011, or between March 2012 and July 2015.

The company building the data center must also promise to have created 35 new employment positions or three positions per 20,000 sq ft of space at its site within six years after it receives the tax exemption.

If the operator fails to deliver the jobs in time, it will owe all of the taxes it was exempt from paying to the state.