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Like a Sale, But Better: Phoenix Data Center Tax Incentives

Like a Sale, But Better: Phoenix Data Center Tax Incentives

I remember as a kid when retailers offered the “We’ll Pay the Sales Tax” deals on Labor Day. Of course, retailers could offer the same percentage discount in a regular sale – but there was something about getting a sales tax break that motivated my parents to shop that weekend.

Stream Data Centers is celebrating the opening of our new Phoenix data center and one of the exciting perks for us, and for our tenants, is an incentive program that eliminates sales tax on equipment purchases for 20 years. The name isn’t exciting – “Computer Data Center Program” – but the savings is. For example, if you spend $20 million on equipment for your initial deployment, and refresh every four years, you’d save $8.8 million.

Plug in your own numbers and get a back-of-the-envelope calculation of how much you could save:


Here’s what you need to know about the AZ data center tax incentives:

  • The exemption is available to all Stream Data Centers tenants leasing 500 kW of capacity or more for at least three years
  • Because our Phoenix data center is a qualified Sustainable Redevelopment Project, tenants get the tax exemption for 20 years (instead of 10)
  • The exemption covers state, county, and city sales tax, which currently stands at 8.8% in the city of Goodyear (part of the metro Phoenix area) where our data center is located
  • Another incentive, which enhances Arizona’s additional depreciation allowance for property tax, provides additional savings

The fact that this tax incentive applies not only to us, but to you as well, is unique. A number of other states offer incentives to attract hyperscale service providers and colocation providers. Few, like Arizona, extend the benefits to wholesale colocation customers as well, making Arizona’s approach to tax incentives a real win/win!

Let’s talk Phoenix colocation benefits
Reach out to us for a virtual tour of the new data center and a customized assessment of how much you could save by colocating with Stream Data Centers in Phoenix. We’ll include in that assessment the savings associated with low power costs in Phoenix relative to other West coast markets. And we can talk about the other benefits of Phoenix colocation – low risk of natural disaster is another big one.

About Our Contributor

Chris Bair

Chief Commercial Officer & Partner
Stream Data Centers celebrated a successful end to 2022 with the promotion of Chris Bair to Chief Commercial Officer and Partner. Read More