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Gov. Snyder signs off on major tax breaks for data centers

Dec 23, 2015

This former Steelcase building is expected to house a new data center in west Michigan.
Credit drtel / Creative Commons

Gov. Rick Snyder has signed bills giving major tax breaks to data centers in Michigan.

All data centers will no longer have to pay sales and use tax. But the new laws are in place in order to lure a single, massive server farm to the Grand Rapids area.

Las Vegas-based company Switch gave the state an end-of-the-year deadline to approve the tax breaks. It has since said it will locate the data center in Michigan.

“It’s imperative that our tax policies continually develop and evolve to meet the needs of the jobs of tomorrow,” Gov. Snyder said in a statement after signing Senate bills 616 and 617 on Wednesday.

“The world constantly changes in how we make things, and we need to adapt and ensure we remain a state that continually draws on innovative commerce and new opportunities for Michiganders.”

Supporters point to Switch’s own estimates saying that project alone will bring $5 billion in investments and a thousand jobs to Michigan over the next decade.

Lawmakers included a provision meant to guarantee those job promises. It requires the entire data center industry in Michigan to create at least 400 jobs by 2022 and 1,000 by 2026. Otherwise, the tax breaks automatically end.

Opponents of the new laws say it’s bad public policy to single out one industry for big tax breaks.

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