Revenue soars in Washington town that became data center hub

By RACHEL LA CORTE and DAVID A. LIEB
Associated Press
The Columbian

OLYMPIA — Until about a decade ago, the rural central Washington town of Quincy was perhaps best known for its apples and potatoes.

Then Microsoft and Yahoo began building computer data centers there, drawn partly by the affordable hydropower from the Columbia River. They came, even though the local government provided no property tax breaks.

Soon, other states began trying to lure large data centers, offering to waive sales taxes on the expensive computer equipment and exempt them from property taxes. To keep pace with the competition, Washington lawmakers responded by passing a sales tax exemption for data centers, which it extended again this year.

Quincy, a town of roughly 7,300 people, now also hosts data centers for technology firms Dell and Intuit, as well as developers Sabey and Vantage.

Washington is among several states that declined to disclose to The Associated Press how much tax revenue it has forgone because of its incentives to data centers, but local officials are tracking gains.

Quincy’s property tax collections have quadrupled in the past decade, with more than 70 percent of such revenue coming from data centers. Its sales tax revenue has risen from $665,000 to about $5 million, even with the state tax break. Read more