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Legislators told data center tax help will benefit Nevada big

CARSON CITY — Nevada’s economic development officials and a top economist said providing tax abatements to massive “colocated” data centers will have staggering effects on the state’s economy, generating billions of dollars in economic activity.

“As we look at some of the numbers that underlie this element of our economy, they are nothing short of massive,” Jeremy Aguero, principal of Applied Analysis, said Tuesday during a hearing on Senate Bill 170.

The bill, introduced in the Senate and heard just hours later by the Senate Committee on Revenue and Economic Development, would provide partial sales and personal property tax abatements for up to 20 years for data centers that invest at least $250 million and meet employment requirements. The bill also would extend abatements to companies in “colocation” facilities, where a company owns the building itself but housees the gear or servers from others.

“The technology sector is a clean industry and one we welcome with open arms,” said Sen. Michael Roberson, R-Henderson, who presented the bill.

Dean Nelson, vice president of global foundation services for eBay, said large data centers are a global economic engine that handles billions of dollars in commerce.

“We sell 10,000 cars a week just through mobile devices,” Nelson said, adding that in any given second there are 800 million items for sale on eBay.

All those transactions require data servers.

“Everything that you’re doing goes back through a data center somewhere,” Nelson said.

EBay is the largest “colocator” in a massive data center operated by Switch in Las Vegas, Nelson said. The company earlier this year announced it will expand its Southern Nevada facility as well as expand to Northern Nevada.

Aguero said racks of servers that handle massive amounts of Internet transactions hold $250,000 worth of gear in one cabinet. In Southern Nevada, the Switch expansion would equate to $5 billion in assets.

“If that number is not sufficiently staggering … think about the fact that gear has a useful life of 3 to 4 years,” Aguero said.

“We’re seeing that investment come again, come again, come again, all the way on the 20-year horizon,” he said.

Nelson put the cost of racks even higher, around $1 million, adding that the company “refreshes” its equipment about every other year.

Aguero projected the measure would create thousands of jobs, generate hundreds of millions of dollars in salaries as well as hundreds of millions in tax revenue.

No action was taken by the committee.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-687-3901. Find her on Twitter: @SandraChereb.

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