Big Yuge Data Center(s) Coming to Freddy (Frederick, North Beach: sales, income)

[The Very Man Himself]

Alcoa announced the sale of their old smelter site, 2,100 acres for $100M (cash) to a new company "Quantum Loophole" that plans to build a data center city, feeding off the existing data center boom in Loudon County. Data center land in Ashburn is selling for $2M an acre. Md passed a tax incentive law last year. No sales tax for 20 years.

https://datacenterfrontier.com/quant...s-in-maryland/

[westsideboy]

Thanks for the update. I didn't know the old aluminum plant had been torn down. It sounds like a big score for Frederick County.

[North Beach Person]

Originally Posted by The Very Man Himself

Alcoa announced the sale of their old smelter site, 2,100 acres for $100M (cash) to a new company "Quantum Loophole" that plans to build a data center city, feeding off the existing data center boom in Loudon County. Data center land in Ashburn is selling for $2M an acre. Md passed a tax incentive law last year. No sales tax for 20 years.

https://datacenterfrontier.com/quant...s-in-maryland/

So what you're saying is that the taxpayers of Maryland will be subsidizing this for 20 years as development partners but not profit partners.

Sales tax exemption? I'm trying to figure out what sales tax a "data center" pays.

You do realize that the way Maryland's property tax system is set up that any increase in assessments automatically triggers a tax increase for everybody due to the Constant Yield rate?

[The Very Man Himself]

Originally Posted by North Beach Person

So what you're saying is that the taxpayers of Maryland will be subsidizing this for 20 years as development partners but not profit partners.

Sales tax exemption? I'm trying to figure out what sales tax a "data center" pays.

You do realize that the way Maryland's property tax system is set up that any increase in assessments automatically triggers a tax increase for everybody due to the Constant Yield rate?

I don't believe property tax is relevant here, but if I thought a company's presence was going to increase land values from $50,000 to $2M an acre, as has happened in NoVa, I'd be quick to offer incentives.

The link below explaining the Maryland Data Center tax incentive passed last year is embedded in the article I posted. I thought the name of the company "Quantum Loophole" is intriguing.

https://commerce.maryland.gov/fund/d...entive-program

[The Very Man Himself]

Originally Posted by westsideboy

Thanks for the update. I didn't know the old aluminum plant had been torn down. It sounds like a big score for Frederick County.

Yes, although data centers are not big employers. That said, I read that something like 75% of global internet traffic passes through NoVa data centers.

[North Beach Person]

Originally Posted by The Very Man Himself

I don't believe property tax is relevant here, but if I thought a company's presence was going to increase land values from $50,000 to $2M an acre, as has happened in NoVa, I'd be quick to offer incentives.

The link below explaining the Maryland Data Center tax incentive passed last year is embedded in the article I posted. I thought the name of the company "Quantum Loophole" is intriguing.

https://commerce.maryland.gov/fund/d...entive-program

Ok, the tax exemption is for personal property of the business, which in this case would be the servers/computers/equipment used by the business. That's a significant number, while local jurisdictions often don't bother collecting it (because it's a pain in the ass) the State always does.

If you think that will do anything other than enrich the landowner's who sell the property you don't understand the way property taxes work in Maryland. All that run up means that in order to capture the tax revenue from the increased value the property tax rate has to be raised on every single property in Frederick City/County. That's what the Constant Yield does.

Tell me, has your property tax ever gone down even though your house, as well as all the properties around you, are worth more? Ever?

https://dat.maryland.gov/realpropert...Tax-Rates.aspx

https://bethesdamagazine.com/bethesd...ike-next-year/

Quick translation:

When assessments go up the tax rate decreases to a level (the Constant Yield) that no more property tax revenue is collected next year than was collected this year. In order to capture the revenue potential of the increased assessments the tax rate must be increased above the Constant Yield rate.

It's just complicated enough that most people can't understand it. It also allows elected officials, when challenged about taxes being raised, to state that the tax rate is the same this year as last (mostly because that rate is kept most of the time after the lower Constant Yield comes in) and the reason a person is paying more taxes is because their property is worth more.

Now, most people know something isn't quite right but they can't quite put their finger on what so they walk away muttering.

[The Very Man Himself]

Originally Posted by North Beach Person

Ok, the tax exemption is for personal property of the business, which in this case would be the servers/computers/equipment used by the business. That's a significant number, while local jurisdictions often don't bother collecting it (because it's a pain in the ass) the State always does.

If you think that will do anything other than enrich the landowner's who sell the property you don't understand the way property taxes work in Maryland. All that run up means that in order to capture the tax revenue from the increased value the property tax rate has to be raised on every single property in Frederick City/County. That's what the Constant Yield does.

Tell me, has your property tax ever gone down even though your house, as well as all the properties around you, are worth more? Ever?

https://dat.maryland.gov/realpropert...Tax-Rates.aspx

https://bethesdamagazine.com/bethesd...ike-next-year/

Quick translation:

When assessments go up the tax rate decreases to a level (the Constant Yield) that no more property tax revenue is collected next year than was collected this year. In order to capture the revenue potential of the increased assessments the tax rate must be increased above the Constant Yield rate.

It's just complicated enough that most people can't understand it. It also allows elected officials, when challenged about taxes being raised, to state that the tax rate is the same this year as last (mostly because that rate is kept most of the time after the lower Constant Yield comes in) and the reason a person is paying more taxes is because their property is worth more.

Now, most people know something isn't quite right but they can't quite put their finger on what so they walk away muttering.

I made no additional or alternative claim.

[North Beach Person]

Originally Posted by The Very Man Himself

I made no additional or alternative claim.

You said that you'd take an increase of assessment from $50,000 to $2,000,000. Lacking an explanation why you think that is a positive the implication is that will increase tax revenues.

If, as was said, that data centers employ very few people it may very well be that the whole development ends up as a losing proposition for the state-minimal income tax from the employees (which will also impact the local jurisdiction) and an exemption from the business personal property tax-while costing current businesses and residents higher property taxes.

[The Very Man Himself]

Originally Posted by North Beach Person

You said that you'd take an increase of assessment from $50,000 to $2,000,000. Lacking an explanation why you think that is a positive the implication is that will increase tax revenues.

If, as was said, that data centers employ very few people it may very well be that the whole development ends up as a losing proposition for the state-minimal income tax from the employees (which will also impact the local jurisdiction) and an exemption from the business personal property tax-while costing current businesses and residents higher property taxes.

My response was made in the context of the text I underlined in your post.

[The Very Man Himself]

Here's some irony for you. A 2020 consultant's report on the effects of data centers in Md focused on four counties. Frederick was not one of them. Oops! Interesting numbers nonetheless.

https://netchoice.org/wp-content/upl...eport-2020.pdf

PGC is hoping to get in on the act. 800+ acres identified.

https://www.pgcedc.com/datacenter

https://www.pgcedc.com/latest-news-f...the-data-is-in