Taxation drives data center location

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The cost of power is a major consideration when locating a mega data center. But another factor is playing an increasing role: Taxes. "The site selection process has changed from low energy, to low energy and low taxes, to taxes and low energy," says KC Mares, president and chief energy officer for Megawatt Consulting, which designs energy efficient data centers.

Income taxes are a major cost factor, and sales taxes are an especially big deal for companies like Amazon.com. "Only three states in US now have no state income taxes [and there are] very few with low sales tax that include hardware and software," says Mares.

But the impact can be huge. Companies can save hundreds of millions a year in taxes simply by, for example, locating that data center in Nevada instead of California.

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