Colorado Data Center Tax Incentives Under Consideration

The Colorado legislature recently began consideration of a new proposed data center tax incentive, which would provide sales and use tax exemptions for certain equipment purchased for in-state facilities.

Toward the end of April, Colorado data center tax incentives were under consideration by legislature and would provide sales and use tax exemptions for certain equipment purchased for in-state facilities.

According to the Denver Business Journal, House Bill 1389 has the support of the local business community, as well as its sponsors Rep. Dan Pabon and House Minority Leader Brian DelGrosso.

This bipartisan proposal, along with several other tax incentives specific to certain industries, have been prepared to be included in the budget for the next fiscal year, which begins on July 1.

Eligible data center operators would benefit from tax breaks on the sale, storage and utilization of IT equipment, including servers, racks and other infrastructure components. If approved, these advantages would be available in July 2015. 

Officials are calling the measure one of the most important up for consideration this year, as it would make Colorado a more competitive location for data center projects. Additionally, as the state seeks to grow its already burgeoning information technology sector, this bill could mean the difference between attracting new organizations, or seeing them locate elsewhere. 

"We believe it to be very significant," said Sandra Hagen Solin of the Colorado Technology Association. "Colorado is so beautifully positioned to skyrocket in the tech industry. We are doing many things now and the potential is great. This sends a signal to the industry that we're serious about growing more."

Previously Offered Incentives
Before introducing statewide data center tax incentives, Colorado officials would approve such benefits on a case-by-case basis, as they did with ViaWest late last year.

The Denver Business Journal reported that members of the Colorado Economic Development Commission offered $50,000 in data center tax incentives to ViaWest. In exchange, the company was able to stay on schedule with a facility and service footprint expansion project, which included the construction of a $208 million global IT center in Douglas County.

Other Benefits of Colorado Data Centers
Colorado islow-risk environment for natural disasters and provides a cool climate. The state also offers lower power rates than many other areas of the country.