Utah lawmakers say more info is needed as data center tax incentives come under scrutiny
Utah lawmakers are beginning a legislative study into tax incentives for large-scale data centers, prompted by reports from other states highlighting high costs. The state currently lacks a centralized system to track the financial impact of these tax breaks. Legislators aim to gather more information before making any policy decisions.
Utah lawmakers are initiating a legislative study into the tax incentives provided to large-scale data centers. This move follows watchdog reports from states like Ohio and Indiana, which have indicated that taxpayers incurred hundreds of millions, and in some cases billions, of dollars more than anticipated due to similar sales tax exemptions.
A 2News Investigates report revealed that Utah does not currently track the overall costs or benefits of its data center tax incentives. Republican Rep. Paul Cutler acknowledged that while Utah's economic development programs typically use a "post-performance" model, a centralized system for tracking all incentives would be beneficial. Democratic Rep. Carol Spackman Moss, a member of the legislative committee studying data centers, expressed the need for more information to fully grasp the incentives' impact.
Democratic Sen. Nate Blouin shared a policy memo highlighting that Utah's sales tax exemption for qualifying data centers is applied at the point of sale, preventing the state from collecting data on foregone sales tax revenue. The memo outlines three options for lawmakers to consider. Both Rep. Cutler and Rep. Spackman Moss anticipate that the interim study process will equip them with sufficient information to make informed policy decisions.