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Microsoft to Get $18 Million in Iowa Sales Tax Rebates

  • Apr 21, 2014 | Gail Cole

 Microsoft to receive sales tax rebates in exchange for new data center.

Microsoft has announced plans to build a new data center and create 86 new jobs in Iowa. In return, the company will receive $18 million in sales tax rebates from the Iowa Economic Development Authority (IEDA).

In March, the city of West Des Moines asked IEDA to award $18 million in sales tax rebates to a mystery company referred to as Project Alluvion, which promised to “created 86 jobs in exchange for finding help from the city and state.” $18 million is “maximum amount possible under the IEDA’s High Quality Jobs Program.”

Now the funding has been approved and the identity of Project Alluvion has been revealed. If some are wondering why a company with “$24.5 billion in revenue and $8 billion in profits in the most recent fiscal quarter” is asking for money in exchange for jobs, that question has not been publicly raised by either the city or IDEA. Iowa State University economist David Swenson attributes that to a strong belief that seems to be “that the [Iowa] market requires the helpful hand of government at all levels.”

$18 million for 86 jobs works out to more than $418,000 per job in state support. That said, West Des Moines estimates Microsoft “will invest $1.1 billion in a new data center that will generate an extra $8 million in property taxes.”

photo credit: DonkeyHotey via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.