Iowa gives millions in data center tax breaks
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Lindsey Bailey/Axios
Iowa gives at least $150 million in tax credits per year to support data center development, per a new report from Good Jobs First, a left-leaning nonprofit research group.
Why it matters: Iowa has become a hub for data centers, bringing in big names like Google and Meta, but the tax credits are potential lost revenue that could help boost the state's coffers, per the report.
State of play: The $150 million estimate is based on state-reported sales and property tax exemptions provided to companies that build or operate data centers in Iowa.
- It comes from Iowa's last tax expenditure report, which was published in 2022.
- Iowa releases the report every five years, but with the AI boom and subsequent data center development, that figure is expected to balloon by the next report, Kasia Tarczynska, a senior research analyst at Good Jobs First, tells Axios.
Zoom in: In Iowa, companies like Google, Apple and Microsoft have all benefited from the tax breaks.
- Council Bluffs' $5.5 billion Google data center is one of the largest in the world, taking up 3 million square feet and receiving more than $36 million in tax incentives.
- But it employs only 900 people — a small number considering the size of the project.
Yes, but: Google has made other local investments, such as free, citywide Wi-Fi and a recent $1.3 million investment in clean water.
- Many of these property tax exemptions are for 20-plus years, but proponents say that long term, they could provide future revenue.
What they're saying: "We are betting on something that might not exist in 25 years," Tarczynska says. "These are very long-term deals, and we don't know if data centers will still look the same — or be in demand — decades from now."