Incentives Watch: Alabama Seeks to Attract Data Centers By Offering Enhanced Incentives

Alabama recently passed legislation aimed at attracting data centers to the state. With the enactment of H.B. 154, known as the Alabama Data Processing Center Economic Incentive Enhancement Act, the state is positioning itself to become a very desirable spot for data centers to locate to within the country.

“This bill will make Alabama one of the most competitive states in the country for the recruitment of large data centers. Incentives drive the location of data centers more so than most any other type of industrial project. This will put Alabama on every list of potential sites for large data centers,” noted Christopher Grissom, partner at Bradley Arant Boult Cummings LLP in Birmingham, Alabama.

The legislation amends the various tax abatement requirements for data processing centers under the Tax Incentive Reform Act of 1992.

Iowa, Mississippi, Nebraska, Virginia, and Washington also have incentives aimed at attracting data centers, according to the Bloomberg BNA State Tax Portfolios. 

“Incentives for this type of high tech industry are the next phase of recruiting tools as states move their focus from traditional manufacturing, as the south's incentives have been focused on, to high tech industries like data centers, biotech, green energy and the like,” according to Grissom.

For more information about the Alabama Data Processing Center Economic Incentive Enhancement Act, check out this Weekly State Tax Report article.

In other developments . . .

Florida reinstated the renewable energy technologies investment credit and the renewable energy production credit, while also creating a sales and use tax exemption for renewable energy machinery and equipment, according to a recent Bloomberg BNA Weekly State Tax Report article. The renewable energy technologies investment credit is available for tax years 2013 through 2016. Taxpayers may claim the renewable energy production credit for electricity produced and sold from a new or expanded Florida renewable energy facility on or after Jan. 1, 2013, but before June 30, 2016.

By: Kathleen Caggiano

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