Kentucky: KY lawmakers to introduce tax incentives for data center giants

Feb 25, 2022 | Posted by MadalineDunn

Kentucky lawmakers are reportedly considering a proposal that would see millions of dollars in state sales tax breaks awarded to tech giants such as Amazon, Facebook, Google and others. This proposed huge tax break has, of course, garnered discussion and a wave of opposition from a number of voices. Meanwhile, proponents argue that currently, Kentucky is not luring in enough tech companies to build, and the tax break would incentivize more movement in that area. 

House Bill 379, passed through the legislative committee on Wednesday and would see data center companies able to avoid sales and use taxes for three decades. In order to receive the exemption, qualifying tech companies building data centers in counties with fewer than 100,000 people, would have to inject a minimum of $150 million and provide twenty jobs in the first five years of their project. Counties of more than 100,000 people, would, comparatively, be required to spend $300 million in the first five years of the project and provide 30 permanent jobs.

Outlining his stance on the proposal, NetChoice President Steve DelBianco told the House committee that, at present, Kentucky is not a “natural magnet” for data centers, and that companies will locate to places that are “most friendly to their businesses.” He went on to call the tax incentive “one small thing,” required to encourage industry. 

On the other side of the debate was Democratic Rep. Josie Raymond of Louisville, who argued that these companies don’t need tax incentives. “Can you help me understand why this is not just a coupon for Facebook, whose parent company META, if anybody understands what that is, had revenues in 2021 of $117 billion, which is 10 times the general fund of Kentucky?” she asked, and subsequently voted against the bill. Adding: “Why can’t that company and others just pay $24 million to support our schools and hospitals?”