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.

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:Robbing Peter to Pay Paul

[adamchou]

No, according to the article...

"We don’t tax the federal government," Mayfield explained to a Utah Senate committee March 7. "So what this bill does is tax Rocky Mountain Power and then gives them the ability to pass that on as an increase in their energy bills. So we collect an equivalent of what would have been a tax on the federal government."

So the US government will be writing Rocky Mountain Power a check and Rocky Mountain Power will write a check to the Utah Government.

Re:Cry me a river...

[adamchou]

I think you misunderstand what the bill is trying to say. The bill is allowing the Utah government to levy a tax on any organization that rents out military property from organizations like Utah National Guard or DoD. Previously, the state of Utah would tax levy taxes against private corporations just fine. However, the NSA is a federal entity so it can't tax the NSA. What this bill does is allow the the state of Utah to tax Rocky Mountain Power and allow Rocky Mountain Power to pass on the additional costs to the NSA. Read this article [sltrib.com] for a more layman explanation of what the bill says. And to drive the point home, they specifically said this during the motion for the bill...

"We don’t tax the federal government," Mayfield explained to a Utah Senate committee March 7. "So what this bill does is tax Rocky Mountain Power and then gives them the ability to pass that on as an increase in their energy bills. So we collect an equivalent of what would have been a tax on the federal government."

Re:Robbing Peter to Pay Paul

[adamchou]

Which is exactly the point. 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

"We don’t tax the federal government," Mayfield explained to a Utah Senate committee March 7. "So what this bill does is tax Rocky Mountain Power and then gives them the ability to pass that on as an increase in their energy bills. So we collect an equivalent of what would have been a tax on the federal government."

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

[schwit1]

"So the US government will be writing Rocky Mountain Power a check and Rocky Mountain Power will write a check to the Utah Government."

And where does the federal government get money to pay its bills? That's right you and me. So Utah is f**ing all US taxpayers.