Louisiana has recruited some of the world’s largest technology companies without establishing statewide rules for how their data centers should be valued for property taxes. A proposal before the Louisiana Tax Commission seeks to fill that gap by creating the state’s first valuation standards for servers, storage systems, networking equipment and the infrastructure needed to power and cool the facilities.

Proposal Details

The Louisiana Association of Business and Industry commissioned the proposal to give companies and parish assessors more certainty about future tax bills as billions of dollars in data-center investment flow into the state. The proposal would assign servers, storage systems and networking equipment a three-year economic life. Under the recommended depreciation schedule, $1 billion of qualifying equipment would be valued at $700 million after one year, $490 million after two years, $340 million after three years and $160 million after four years.

Electrical and cooling infrastructure used to operate the data center would receive an eight-year economic life. The proposal is not intended to change existing agreements or reduce any payments already promised by companies such as Meta, which is building a massive artificial-intelligence data center in Richland Parish.

Impact on Tax Collections

Lower property values generally result in lower tax collections when the tax rate remains unchanged. However, the purpose of the proposal is to recognize how quickly computing technology loses economic value, rather than to guarantee a particular tax result. The distinction is between equipment being “obsolete” and experiencing “obsolescence.”

A server does not necessarily stop working after three years. It may nevertheless be worth substantially less because newer equipment can process more information while using less power and space. The proposed three-year schedule would place data-center computing equipment among the fastest-depreciating property in Louisiana’s valuation tables.

Original reporting: KTBS 3 (Shreveport) — read the source article.