Report: Arizona Tax Bill Would Benefit Apple Data Center

Arizona legislature is trying to extend renewable energy tax credits and exemptions that may benefit the recently announced Apple data center project in the state, Associated Press reported. Apple is converting a 1.3 million-square-foot manufacturing plant into a data center in the Phoenix suburb of Mesa, with construction expected to start next year.

The bill breezed through the state's House of Representatives. It would expand a $5 million sales tax credit last year to include international operations centers that make a capital investment of $1.25 billion. The bill was amended to match the Senate version to speed up final governor approval once it passes there.

To qualify, the Cupertino, California-based company would have to invest in at least $100 million in new renewable energy facilities and use some portion of that energy to power its data center. The company is very likely to do that, given its recent history of large renewable energy investments.

The bill would also exempt the Apple data center from sales taxes on electricity or natural gas, which equate to a $1.3 million loss of revenue for the state’s general fund.

Arizona hopes to get its foot in the door with Apple partially because it could lead to bigger projects, Senator Bob Worsley told the AP. "We think we have a real shot at being a secondary place for Cupertino," he was quoted as saying.

Apple acquired the facility in 2013 from GT Advanced. GT Advanced planned to make sapphire glass for Apple products, but it went bankrupt that year. Instead of seeing it as a worm in the Apple (groan), Apple bought the plant and committed to building out 70 megawatts of new solar power generation.

The facility will control Apple’s global networks, employing about 150 workers and running on 100 percent renewable energy.

The Greater Phoenix Economic Council supported the Senate version (Senate Bill 1468). Opponents called the bill “specialty legislation.”

This week, one of the state’s largest data center players, IO, began offering renewable energy options for customers under an agreement with utility provider Arizona Public Service.

Arizona passed data center tax incentives in 2013. Microsoft is also said to be eyeing Arizona for a data center and has been looking into tax incentives there.