Missouri enters data center competition with new tax breaks

JEFFERSON CITY, Mo. -- When Internet service provider Bluebird Network bought a Springfield computer data center last year, it did so with the intent of gradually expanding it over the next few years.

Those plans changed when a new Missouri law took effect this summer offering tax breaks to data centers. That prompted Bluebird Network to accelerate its expansion plans, the first company to publicly cite the new incentives as a reason.

"It is encouraging us to move more rapidly," said Michael Morey, president and CEO of the Columbia-based company.

The tax break could save the company an estimated $191,000 on its planned $8 million expansion.

Officials are hoping the incentives also will persuade other data center developers to choose Missouri in what's become an increasingly aggressive competition among states for the high-tech computer centers that are pivotal to an Internet-based society.

Missouri is at least the 23rd state to enact specific data center incentives, according to an Associated Press review of state laws. Many other states are using their general incentive programs for data centers.

The Missouri law offers sales tax exemptions to new data centers investing at least $25 million over three years and employing at least 10 people in jobs paying at least 1.5 times the county's average wage.

Existing data centers can qualify for the tax break by investing at least $5 million over one year while adding at least five jobs over two years that pay at least 1.5 times the average county wage.

Those investment and employment thresholds are easier to meet than laws in many other states. But until now, Missouri often has been left off the short list of potential sites for data centers.

Low electricity prices, access to high-speed Internet and a facility secure from natural disasters are important for data centers, but those benefits are available in many states.

"It's a very competitive world," said Steve Johnson, CEO of the Missouri Partnership, a public-private organization that will be attempting to recruit data centers to the state. "The role of incentives are really to tip the scale."