The Missouri House and Senate approved a tax incentive for data storage centers Thursday, sending the measure to Gov. Jay Nixon, who vetoed similar legislation last year.
The measure would allow new or expanding data storage centers to buy equipment, utilities and materials without having to pay state and local sales and use taxes on such purchases. Supporters say such incentives are necessary because Missouri is losing out on data storage centers to other states that offer them, including neighboring Kansas and Oklahoma.
Rep. Kevin Austin, R-Springfield, said other than the lack of tax incentives, Missouri is a good location for data storage centers, which require large amounts of power, because of the cheap cost of electricity. He also said the state has a good pool of IT workers from the state's universities and is protected from natural disasters.
"But without these incentives we will not be on site selector's radar, we will not get these data storage centers," he said.
The House passed the measure on a 97-53 vote, which would not be enough to override a veto, if Nixon goes that route. Nixon vetoed a bill with similar data storage center provisions last year and said in his veto letter the broad exemption had no assurance the state would get a return on its investment.
Lawmakers this year say it includes protections that ensure the state will get an equal economic benefit from the sales tax exemption to make it more palatable to Nixon. Scott Holste, a spokesman for the governor, said the governor would not comment.
The measure would require data center owners invest $5 million and create 5 new jobs for an expansion or $25 million and 10 jobs for a new facility. The jobs must pay 150 percent over the county average wage to qualify. A business would have to submit an application to the state's Department of Economic Development to get the exemption and agree to pay penalties if the business fails to maintain those jobs or meet other requirements.
The total amount of tax exemption benefits given to a business would not be allowed to exceed the benefit to the state based on an economic model used by the department.
Some opponents questioned whether the measure was necessary. Sen. Ed Emery, R-Lamar, said he did not think the incentive would change any business decisions and companies already planning to come to Missouri or expand here would simply take advantage of it.
"We act like we're winning companies here, but I don't feel like we are," Emery said.