Indiana is rolling out a historic welcome mat for Big Tech. Is it clever… or is it crazy?
The Hustle

Indiana is rolling out a historic welcome mat for Big Tech. Is it clever… or is it crazy?

Indiana just passed new law offering any tech company that commits $750m to a data center in the state 50 freakin’ years of forgiveness from sales taxes.

Indiana passed a new law offering any business that commits at least $750m towards building a data center in the state 50 freakin’ years of exemption from sales taxes, according to a Bloomberg report.

Since most local neighborhood tech startups don’t have $750m lying around, the legislation seems to be a clear effort to lure Google, Apple, or Facebook — all of which have data centers in other Midwestern states — to the Hoosier state. 

Other states also offer incentives, but Indiana’s is in its own league 

A total of 30 US states offer some kind of deal sweetener to encourage tech companies to build data centers within their borders. 

But, in most cases, those incentives (usually tax breaks) expire in 10 years — maybe 15 — instead of a half century. 

So the question is: Will Indiana’s offer be worth it?

First, the facts: Since Indiana’s sales tax is 7%, the deal would cost the state a guaranteed $70m in tax revenue (and potentially much more) if a company takes the bait for a $1b center. A data center of that size would also provide local construction companies with millions of dollars worth of contracts.

But, beyond those bare bones facts, opinions differ on the law’s ultimate  impact in terms of dollars and sense…

Despite the controversy, other Midwestern states now must decide whether they should offer similar incentives or sit this round out: Michigan legislators are currently debating a proposal to offer data center sales tax breaks through 2055.

So this is either the start of a Midwestern arms race for data center supremacy — or a 50-year headache for Indiana. 

Want to read more about tech’s great migration to the Midwest? Check out this Hustle story about life in the “Silicon Prairie.”

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