Google’s brilliant engineers may have tamed the World Wide Web and mapped the planet, but there’s one challenge even they may not be able to overcome—local property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. collectors.
It appears Google’s plan to expand onto the NASA/Ames Research Center campus in Santa Clara County has local taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. authorities up in arms. Why? The campus is on federal land, allowing the internet giant to skirt potentially millions of dollars in local property taxes. From the San Jose Mercury News:
Santa Clara County’s tax assessor said he would fight to make sure the high-tech heavyweight won’t escape paying its fair share of property taxes by locating its complex on federal land.
The Internet giant, based in Mountain View, announced it intends to build up to a 1 million-square-foot complex on the federal research park at Moffett Field, which Ames officials have dreamt about transforming into the intellectual hub of Silicon Valley.
Assessor Larry Stone estimated a project of that size would generate at least $2.5 million to $3 million in annual property taxes for local governments.
As a rule of thumb, if a growing company like Google shows up in your neighborhood, that’s good for economic development. Even if tax authorities win their tax battle with Google, it’s likely to be a pyrrhic victory, sending a damning message to other firms looking to potentially locate to the area.
California’s business tax climate already ranks 38th worst in the nation. And as we’ve written before, there’s a real danger that if you tax it, they won’t come.
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