Facebook disputes data center taxes

Facebook has concerns over property taxes relating to its Prineville, Ore., data center.

The Statesman Journal in Salem, Ore., is reporting that Facebook is disputing property taxes on its Prineville data center. You can read the full article here.

In a nutshell, the troubles began last summer when Facebook was told by the state to assess any property “real and personal, tangible or intangible," in relation to its property taxes. Concern arose that Facebook might be taxed on assets such as the value of its brand. The tax bill is associated with the data center Facebook chose to build in Crook County, Ore., and as part of the deal, Facebook promised jobs for 55 full-time employees in exchange for tax breaks.

By October, the Statesman Journal article reports, tax authorities told the Bend Bulletin newspaper that Facebook faced an annual tax bill of $390,000; the next day they backtracked and said the tax bill would be $26,000. Official inquiries to the state Department of Justice seemed to address the concerns.

Nonetheless, Facebook is still asking state lawmakers to pass legislation to exclude companies that own or lease a data center in enterprise zones from having their value assessed by the state. Thus, the Senate Finance and Revenue Committee introduced a bill that would exempt property in enterprise zones from being assessed by the state. The bill is similar to a proposal by Rep. Mike McLane, R-Powell Butte, that also addresses the same issue. The proposals are moving forward.

As large companies seek out ‘off-the-beaten-path’ locales to build data centers, a number of issues – like the tax bill troubles Facebook and Oregon are ironing out – will continue. Some issues are tougher than others. Remember this blog I posted about the impact – good and bad – that Apple’s data center has had on Maiden, N.C.? While the data center is adding money to the North Carolina county’s coffers, which have been flattened as furniture and other manufacturing business in that region dried up, there’s anger and confusion as to why such a big company with such a sprawling facility doesn’t hire more hometowners.

I’d love to hear your thoughts on the issue. What should tech companies like Facebook do as they spread their operations across the country and into rural areas and small towns? How should tech- and business-savvy companies do to smooth relationships, become good citizens? I know the issue isn’t new, and in years’ past many times the addition of one tech company opened the doors for many more, and as such, numerous tech corridors now run through all parts of the country, far and away from Silicon Valley. Thoughts?

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