As the world of data centers continues to emerge in the commercial real estate industry, it is essential to understand the tax risk to data center owners. With the increase of e-commerce, social media and overall use of technology, data centers are more prevalent now than ever. As a result, real estate professionals are working to understand how they should be appropriately valued for tax purposes. Where we see a fundamental breakdown is in correctly distinguishing sales tax on the equipment, personal property tax on all the property inside of the center and lastly real estate tax on the building itself.
Although complicated to assess, cities and states around the country are recognizing the impact of data centers in generating revenue through local taxes and are all in a race to develop the right mix of tax credits, incentives, and tax revenue.
To help educate the tax science of data centers Data Center Dynamics, Kisandka Moses, who is producing this year’s DCD New York conference asked Ross Litkenhous, our Global Head of Business Development for Altus Expert Services, several questions to help navigate the uncharted territory of data center taxation.
Some of the questions include:
- What specific taxes have recently come into focus for the data center industry and how it will impact valuation methods?
- How important is ping, power, and pipe in the decision of a site selection specialist versus the consideration of data center taxation?
- Are there any other regions you foresee becoming ‘model’ examples of consumption hubs?
- What are some of the drivers behind the data center as an asset class and why do you think data centers are emerging without buoyant returns over traditional REITs?
Read the complete Data Center Dynamic Guest Q&A with Ross Litkenhous, Altus Group’s Global Head of Business Development. Ross will speak at the upcoming DCD New York event on April 9th to share more insights into “The Wild West of Data Center Taxation.”