OLYMPIA – Last week the state Senate passed a bipartisan measure sponsored by Sen. Janéa Holmquist Newbry aimed at spurring economic development and job growth in rural Washington counties.
Senate Bill 6550, which passed 35-13, extends a tax incentive to tech firms willing to build data centers in Washington.
“First and foremost, this bill is about creating jobs and getting Washingtonians back to work,” said Holmquist Newbry, R-Moses Lake and chair of the Senate Commerce and Labor Committee.
“Families across Washington are still struggling to find work in this fragile economy. With this bill we have the potential to make central Washington the Silicon Valley of data centers and cloud technology, employing large numbers of Washingtonians with some of the largest, most well-known firms in the world. “
SB 6550 would extend the expiration date, from 2015 to 2025, on the sales-and-use tax exemption for tech companies that purchase eligible server equipment and power infrastructure for eligible computer data centers. It also narrows the eligibility to exclude small container servers, known as IT-Pacs, to help guarantee the incentive will be used primarily by employers creating new, well-paying construction, electrical and high-tech jobs.
Tacoma Sen. Steve Conway, the ranking Democrat on the Commerce and Labor Committee, noted during the Senate floor debate that many of the jobs that would be created by Holmquist Newbry’s bill would be family-wage jobs, highlighting that the bill also has the support of many building-trade unions.
“The construction of several data centers in central Washington has been a big boost for local economies and working families that depend on those construction jobs,” said Jimmy Haun, political director for Northwest Carpenters.
Holmquist Newbry pointed out that when data-center construction reached its peak several years ago, Microsoft employed 525 and Yahoo employed 400 in the region. Washington lost out on hosting data centers for Facebook, Google and Amazon, among others, when the tax incentive was allowed to lapse in 2011-2012. Microsoft cut back on its plans for expansion in Washington and moved its servers to Texas, citing Washington’s tax burden as the main reason for the move.
Holmquist Newbry said the bill will send an encouraging signal to tech companies to start or resume their plans for job creation in Grant County and other parts of Washington.
“Our rural communities and ports have testified that this exemption is necessary for Washington to competitively recruit and maintain high-tech data centers and related facilities,” she said.