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Treasurer Larry Pack released Tuesday a tax analysis report on two data center projects in Mason County: The Nscale Monarch project; and the Starwood Tamarack project.
The analysis places the total tax income from the two projects at over $231 million annually, a fraction of the roughly $77 billion the companies plan to invest developing the data centers.
State code gives data centers significant tax breaks, including the valuation of property like computer servers for tax purposes at 5% of its original cost.
The state also waives the 6% state sales tax for high-technology business services including computers, servers and building materials for direct use in a high-technology business.
The analysis focuses on how the distribution formula for property taxes associated with data center investments could affect local government entities, including county commissions, county school boards, and other associated entities. According to House Bill 2014, 70% of all tax revenue is diverted to the state’s coffers, leaving 30% for local governments to distribute as they see fit.
The analysis, completed by Mark Muchow, West Virginia Treasury strategic analyst, shows the expected government revenue gained is $47.5 million for the Mason County Commission and $90.3 million for Mason County Schools annually. The Personal Income Tax (PIT) Reduction Fund would receive more than $66.8 million. An extra $7.2 million goes to the county commission’s Fire and EMS Program, a nearly 9.5-fold increase in such funding. Other counties would share approximately $13.3 million, averaging roughly $240,000 per county.
“It is crucial that citizens and policymakers understand the impact these projects have on their communities. That is why we continue to put our best estimates out as these projects are announced across the state,” Pack said in a press release. “Once these projects are completed, there will be a huge increase in local revenues for schools, the Mason County Commission, and local EMS. These projections underscore the importance of transparency and thoughtful discussions about how these revenues can be used to strengthen these communities for generations to come.”
Last month his office released a similar analysis of tax revenue from two data centers in Berkeley and Putnam counties. The total tax income from the two projects was estimated at over $100 million annually on a roughly $17 billion investment from developers Penzance Management and Google.
Matt Irby, state tax commissioner, told lawmakers earlier this year that estimates of tax revenue from data centers are based on the best information available today, and that it will be years before a large-scale data center is built that state officials can formally assess for tax revenue.