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Amazon May Build Data Center in Ohio

  • Sep 24, 2014 | Gail Cole

 Ohio is courting an AWS data center.

Amazon currently collects sales tax in 21 states, and Ohio isn’t one of them. The online behemoth will collect in Maryland and Minnesota beginning October 1, 2014. Will Ohio be the 24th state where Amazon collects tax?

It’s hard to say. Right now there is more talk of giving tax incentives to Amazon than having Amazon collect Ohio sales tax. The company is on track to win generous tax incentives in exchange for building a $1.1 billion data center for Amazon Web Services (AWS) in Dublin, Ohio. The Ohio Tax Credit Authority has acknowledged that it “approved a 100 percent, 15-year sales tax exemption for Vadata, a wholly owned Amazon subsidiary.” In return, Vadata will make “a capital investment of at least $1,110,000,000 during the 3-year investment period starting on August 25, 2014” (Government Technology).

That sales tax exemption will be extremely useful when the company purchases equipment at the Ohio location. Vadata has also won a 75%, 15-year tax credit for the “creation of $9.6 million in annual payroll.” In return, it will create 120 jobs at the date center by the end of 2018.

But tax incentives may not be enough for Ohio to secure the data center. Amazon is also working to get the land for the site--almost 70 acres—for free from the City of Dublin. The City County is considering the proposal, which has the support of the Director of Development and the Economic Development Director.

Amazon has not commented on the prospective Ohio data center, but it has admitted to be “constantly evaluating a long list of additional target countries and U.S. locations.” AWS is currently the market leader in cloud-computing platforms.

Amazon is scheduled to start sales tax collection in South Carolina, where it already has a fulfillment center, on January 1, 2016.

photo credit: jspaw 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.