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Apple May Get More Tax Breaks for Mesa Plant

Pipes wait to be installed at First Solar factory being built in Mesa in April 2012. Following the bankruptcy of FirstSolar and GT Advanced Technologies, Apple will take over the 1.3MSF building to house its global data center. Photo credit: Deirdre Hamill/The Republic

By Mike Sunnucks for Phoenix Business Journal

Republican leadership in the Arizona House of Representatives has introduced a new bill making sure Apple’s planned $2B data center in Mesa qualifies for energy tax breaks.

The measure, House Bill 2670, also has specific language making sure information about the Apple ‘command center’ is kept secret.

The legislation is sponsored by House Speaker Dave Gowan, R-Sierra Vista, Majority Leader Steve Montenegro, R-Avondale, and other GOP lawmakers.

It is similar but not identical to legislation forwarded by Senate President Andy Biggs, R-Gilbert, in the upper legislative chamber.

Both measures incorporate “international business centers” with capital investments of $1.25B into existing tax breaks related to energy use at manufacturing plants and renewable energy used to power those facilities.

The Legislature created those tax breaks last year for Apple’s failed sapphire glass plant in Mesa with now bankrupt supplier GT Advanced Technologies.

Mesa Property Taxes

Apple Inc. paid $880K less in property taxes annually at its Mesa building than were paid by the building’s previous owner, First Solar Inc.

That is thanks to a property tax break bestowed on the 1.3MSF building after Apple bought it from the Tempe-based energy company in 2013.

The lower rate could save Apple as much as $1M annually in property tax payments going forward.

Apple paid $358K in property taxes last year for its Mesa building now slated to house a 150-worker data center, according to county records.

That compares to First Solar, which paid more than $1.2M in property taxes in 2013, according to county records and tax firm Wentworth Webb & Postal LLC.

Apple bought the building in 2013 for $114M.

That tax bill was lowered by the state designating the Apple property in the East Valley a Foreign Trade Zone. That gives Apple’s 1.3MSF building a 5 percent property tax rate instead of the 18 percent paid by most.

The City of Mesa pumped $10M worth of infrastructure improvements into the building for a First Solar plant that was never put into production.

Read more at Phoenix Business Journal: Arizona House leadership pushes Apple energy tax breaks for Mesa data center; and The cost of Apple: Tech titan gets big property tax break in Mesa