This State’s 50-Year Bet on Big Tech Could Cost Hundreds of Millions of Dollars

Ed Soliday likens data centers to the Spruce Goose, the enormous wooden airplane Howard Hughes flew just once. “Everybody laughed at him,” says the Indiana state representative, “but it wasn’t the airplane where he made his money.” The big swing, he notes, helped catalyze a fortune in government contracts for Hughes’s aircraft company, even though the original vision was a miss. This is how Soliday, a Republican, sees a new law he helped pass, which eliminates sales taxes for an unprecedented five decades for a company that commits at least $750 million to a data center in his state.

The legislation is aimed squarely at luring tech giants such as Apple, Facebook, and Google, which are constructing or have constructed massive cloud campuses in nearby Iowa, Ohio, and Nebraska. While 30 U.S. states offer some kind of tax incentive for data centers, Indiana’s law stands out from those of its neighbors, whose provisions typically expire within 10 to 15 years of construction. Many of the Indiana law’s advocates will be dead before data center builders owe the state any money. (Soliday, for example, is 74.) “It’s hundreds of millions of dollars over the course of 50 years,” says Kirk Offel, managing partner of Overwatch, a consulting firm that’s advising data center developers in Indiana. That’s money that won’t be available to public schools, which rely heavily on state sales taxes.