US states can't account for datacenter tax breaks. Literally Many US states and local authorities are violating generally accepted accounting principles (GAAP) by failing to disclose revenue lost to datacenter tax subsidy schemes, according to Good Jobs First. The accountability nonprofit has a bee in its bonnet about tax abatement programs for datacenters, which it says are costing …
Oh, WHY should I be surprised? "Tax incentives" are corporate welfare by any other name, granted to private profits from public costs writ large. They just change the name so the [peon] public (as usual) will stay in their lane; cooking the books just seems within the modus operandi of the graft.
Not defending Trump, but this is a state matter it would not involve him or the federal government as the states are the ones giving out the subsidy from their own budgets. This is about the states not following proper accounting practices to disclose their losses to their constituents.
TX property tax rates run around 1-2% of real value. The DC's I expect have value greater than 100B between land and capital, and I doubt they pay a penny. Add to that TX also has a sales tax, a gross receipts tax, ... I expect the state is waiving several B to cozy up to the DC builders.
Why bother ?
Nothing will be done because Big Business requires subsidies.
I am still waiting for an explanation for why taxpayers should be subsidizing multi-billion-dollar behemoths, but I'm guessing that report will be filed, as we say in French, la semaine des quatre jeudis.
I've yet to see an explanation other than politicians not getting it and assuming a DC means something along the lines of a big tech campus or complete corruption where politicians happily give away public money in exchange for a smaller amount for themselves. I think the former is more common than many think, but it really should be decreasing because, with the increased coverage of and complaints over AI DCs, politicians eventually have to look this up instead of just guessing.
US statescan'twon't account for datacenter tax breaks
FTFY. Sounds like an intentional decision on their part not to report this information because they know how bad it would look, rather than a genuine inability to do so.
Hate to be the NIT, but local jurisdictions in the US are NOT required to use GAAP. The argument should be made that they should, but that's somewhat skipped here.
I think a stronger case could be made by drilling down into the differences between (1) Those that do and elect no exceptions to GAAP, (2) Those that do but take exceptions, and (3) Those that don't use GAAP. Then (use the subsidized AI if you like!) to correlate where the biggest tax deals are made. I bet Deloitte does studies on where the most favorable tax jurisdictions are for AI DCs!
From this report linked below, titled "Financial Reporting Framework Requirements for State and Local Governments: Evaluating GAAP Choice":
"there is no single authority that requires that GAAP be utilized. Rather, each state can decide to require a financial reporting framework (either GAAP or an alternative) or allow its local governments
choice in selecting a framework"
https://gasb.org/page/ShowPdf?path=Working%20Paper%20March%202025.pdf&title=Financial%20Reporting%20Framework%20Requirements%20for%20State%20and%20Local%20Governments:%20Evaluating%20GAAP%20Choice
