MI Legislature OKs more tax breaks for data center

Switch pyramid

The Switch pyramid in Gaines Township. (October 2019)

LANSING, Mich. (AP) — The Republican-led Michigan Senate on Tuesday approved additional tax breaks for a major Grand Rapids-area data center, sending the bill to Democratic Gov. Gretchen Whitmer.

Las Vegas-based Switch opened a mega-campus of computer servers in Kent County’s Gaines Township in 2017, after Michigan exempted it and “co-located” clients from sales, use and business-equipment taxes. Switch also was freed of many property taxes under a 2016 agreement.

The legislation cleared the Senate 27-10 after barely advancing from the GOP-controlled House in December, even after Switch and two school districts worked out their differences.

Nineteen Republicans and eight Democrats supported the bill Tuesday. Seven Democrats and three Republicans opposed it.

The legislation would clarify that Switch is exempt from certain school taxes it was assessed for the first time more than a year ago. Switch has conceded that the deal as written clearly does not abate some taxes but has said the levies run counter to its “understanding” of the agreement with the state, Kent County and Gaines Township.

The nonpartisan House Fiscal Agency has estimated that the bill would reduce school millages by $242,000 for the 2019 tax year, though much of it could be offset by raising taxes on others.

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