The new NSA datacenter gets a surprise tax bill

A story in the Salt Lake Tribune, put together through diligent research using Utah’s open records law, has indicated that a Utah law passed this year has added a 6% tax to the cost of power purchased from Rocky Mountain Power. In what seems like a very circular process, the money from the law that specifies this tax is directed towards Utah’s Military Installation Development Authority, which is a program that allows for long-term leases of government-owned land and facilities to private organizations. Apparently, the $1.5 billion datacenter project at Camp Williams, Utah falls under its discretion.

Weeks after the new measure was signed into law, Utah Governor Gary Herbert’s staff received an email expressing the NSA concerns about the new tax, pointing out that it came as a surprise and that stable power prices were one of the major factors that led to the selection of the Utah site. The surprise part was itself surprising, as an attorney for Utah stated that the agency had been informed of the proposed tax before the measure had been signed by the Governor.

With an estimated yearly power bill of $40 million, the tax would add an additional $2.4 million to the operating costs of the datacenter. All of the major state level players who were involved in attracting the datacenter project are claiming that they were unaware of the potential tax, nor were any of them consulted about the impact it could have on the datacenter facility. At this point in time, the newspaper is reporting that there are negotiations ongoing about the facility, and its tax liability is scheduled to be resolved by September.

UPDATE: Nate Carlisle, of the Salt Lake Tribune, sent me the following information: The Military Installation Development Authority still has discretion on when, or if, to apply the tax and at what rate up to 6 percent

So at this point the decision if the tax is to be applied, or in what amount, has not been announced.