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Data centers require a data driven approach to property taxes

Advancements in information technology and the need for storage have thrust data centers into the limelight as one of the fastest growing asset classes in the real estate sector. The pace of private investment, coupled with complex tenant landlord leasing fundamentals, have left taxing authorities struggling to accurately value both the real and personal property at these locations. The resulting assessments often mean paying more in property taxes than what is required.

Data centers really look at taxes as a cost of either ownership, or occupancy, or both, when making siting decisions and the various factors that are taken into consideration when looking to expand or locate…there are now more than 30 states offering incentives to attract and grow their data center sectors.

Josh Levi

Vice President of Policy, Northern Virginia Tech Council

Webinar

Data Centers- Where is the Real Estate? 

Data centers- where is the real estate? The search for real property’s role in the modern data center

The modern data center is a critical component of the nation’s data and telecom infrastructure. As data centers multiply, real estate investors, assessors and market observers are left searching for the answer to the question; Where is, and more importantly; What is, the real estate? Watch the recorded webinar to learn the 3 ways to value a data center, use-cases and how to avoid double taxation.

The wild world of data center taxation

The pace and variety of investment, complex leasing structures, and competition for site selection has left taxing authorities struggling to check the right boxes in the tax code as it applies to data centers. The result is disparate tax liabilities for neighboring properties and impossible budgeting and financial forecasting as jurisdictions implement new laws to capture tax revenue. Some jurisdictions are looking to others that already have good tax policy and credit and incentive structures in place, while others are pioneering new taxation ideas, usually not to the benefit of the data centers.

Report

The Wild World of Data Center Taxation

PODCAST: HawkTalk 29. We’re talking data center real estate

September 23, 2019

Senior manager of real estate consulting at Altus Group, Nicholas Carter visits dcH to give his thoughts on the data center industry and why determining the real estate value on data centers can drastically vary from other property types. Join the discussion below in the comments and give us your thoughts on these unique pieces of property that we call data centers.

PODCAST: The Driving Expansion of Data Centers in Northern Virginia

Guest: Josh Levi, Vice President of Policy at the Northern Virginia Tech Council (aired 10.29.2018)

Being the largest regional data center market in the world, Northern Virginia continues to be a key destination for companies looking to own and operate these specialized facilities – reinforcing the area’s reputation of being “Data Center Alley.” Since data centers are highly capital intensive, tax considerations and incentives are vital for companies expanding in the region. Along these lines, the State of Virginia offers compelling sales tax incentives on equipment purchases to qualifying data centers through 2035, further helping to propel the region’s data center footprint.

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