Apple Gets $208M in Tax Breaks to Build Iowa Data Center

Iowa approved a deal Thursday to give Apple $208 million in state and local tax breaks to build two data storage centers near Des Moines and the promise to create 50 jobs.

The deal approved by the Iowa Economic Development Authority includes a refund of $19.6 million in state sale taxes for Apple Inc. and a $188 million break on property taxes from Waukee, a booming suburb bordering Des Moines.

In addition to the promised 50 jobs, Apple has agreed to buy 2,000 acres of land for the $1.4 billion project, enough to allow for future development, said Debi Durham, the state’s economic development director.

Apple CEO Tim Cook and Republican Gov. Kim Reynolds were expected to discuss the deal at a news conference later Thursday.

Critics were quick to cast the deal as bad for the public.

“It’s a net fiscal loss that it’s a straightforward giveaway in the economy to a company that’s extraordinarily wealthy and it makes no sense from an economist’s point of view. It only makes sense from a politician’s point of view,” said David Swenson, an economist at Iowa State University and critic of such large economic development project tax breaks.

The economic development board’s chairman, Chris Murray, though, said such projects bring people who build homes, generating tax revenue and causing other businesses to look into moving to Iowa.

“They say we should go to Iowa because we have these epicenters there. And as you look at the age demographics and the growth of Iowa, I think it’s really difficult to challenge the fact there are ancillary growth benefits from making an investment like this,” he said.

Google, Facebook and Microsoft have already built billion-dollar data centers in Iowa. Like Apple, they were drawn to the state by its generous tax breaks, wind-generated electricity and relative security from natural disasters that could disrupt service.