NSA Data Center the Focus of Tax Controversy

Nerval's Lobster writes "Location is everything when choosing the site of a data center. Firms such as Microsoft and Google and Facebook spend a lot of time looking into the costs of land, power, regulation and taxes before placing their respective data centers in a particular place. Sometimes, that local tax bill comes into play in a big way. Just ask the National Security Agency which learned it faces a multimillion-dollar annual state tax on the power consumed by its new data center in Camp Williams, south of Salt Lake City. The Salt Lake Tribune obtained a series of email exchanges between the feds and the state, with the NSA protesting a $2.4 million tax on its annual power expenditure, pegged at about $40 million. Harvey Davis, director of installations and logistics for the NSA, sent a letter (subsequently quoted by the newspaper) to state officials that made the logistics argument: 'Long-term stability in the utility rates was a major factor in Utah being selected as our site for our $1.5bn construction at Camp Williams. HP325 [the new law] runs counter to what we expected.'" This would be the data center William Binney et al claim is logging almost all domestic communication.

Comments

Re:Robbing Peter to Pay Paul

[adamchou]

Actually, that's slightly incorrect. After reading through the articles a bit more, Utah specifically said they can't tax the federal government. So what they're doing is taxing the power company the additional 6% so that the power company can pass on the additional costs to the NSA, effectively taxing the NSA an additional 6%.

Re:Cry me a river...

[Anonymous Coward]

(Where do you think the Federal government gets its money?)

They borrow it from China.

The US debt is about US$ 16.7T right now: http://www.treasurydirect.gov/NP/debt/current

China owns about $1.25T of that: http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

That's about 7.5%. The next largest foreign owner is Japan, which owns $1.1T (6.6%).

The largest single holder is the US Social Security Trust Fund, with the Fed also owning about $2T currently thanks to their quantitative easing activities.

It's become of a bit of an urban legend: yes, China holds a good chunk, but not as much as people think.

Re:Robbing Peter to Pay Paul

[Jah-Wren Ryel]

They can't tax the federal government. So they decided to create a law that allows for a loophole that taxes the power company and the law also allows the power company to pass the additional costs on to the federal government

I am sooooo OK with this. Seems like just deserts for all the times the fed has collected taxes and then held those funds hostage in order to force the states to pass laws like speed limits.