Tax Cuts Stimulate Data Center Growth in Ashburn, Virginia

23 Oct 2013 by Technology

"Loudon County, home of Ashburn, Virginia has experienced massive data center growth over the past few years, a market rise that has been sustained through the efforts of county and Virginia officials to make the region one of the country’s most favorable data center locations.

Last year, Virginia Governor Bob McDonnell signed legislation that expanded the language of sales and tax exemptions to cover computer equipment and software purchased and/or leased by data centers. Celebrated at the time, the tax incentives have created an array of opportunities for some of the area’s top service providers. DuPont Fabros Technology announced that the company’s Ashburn data center tenants recently surpassed $900 million invested in the DFT Ashburn Corporate Center (ACC) site since the beginning of 2009.

“This sales tax exemption enabled DFT to begin development of the second phase of its ACC6 data center last year,” said Hossein Fateh, DFT president and chief executive officer. “Since ACC6 Phase II opened 100% leased in early 2013, we were able to commence development of the first phase of our ACC7 data center. This sales tax exemption is helping to keep Virginia as the optimal location for data centers on the east coast of the United States.”

Even more economic incentives could be on the horizon, reported the Washington Business Journal. The Loudon Board of Supervisors is mulling the implementation of a personal property tax rate reduction for data center equipment. Several other industries benefit from similar rate reductions in equipment such as heavy construction machinery, satellite manufacturing and aircraft flight simulators. While no specific proposal has been made, it’s likely that data centers, responsible for around 60 percent of the county’s tax haul, will continue to receive favorable treatment in order to stimulate expansion.

Besides DuPont Fabros, Digital Realty Trust, Raging Wire, Latisys, Corporate Office Properties Trust and nearly every other major data center provider maintains an Ashburn colocation presence."

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