The Economic and Revenue Impact of Data Centers in Pennsylvania

Econsult Solutions, Inc. (ESI) was retained by a coalition of data center developers and suppliers to analyze the potential growth of the industry in Pennsylvania if a full data center sales and use tax exemption existed, similar to what is available in more than 20 other states. Tax incentives have been cited as a driving factor in recent data center location decisions, but Pennsylvania has fallen behind. Since 2008, the state’s share of national data center industry employment has shrunk from 3.8% to 2.8%.

The ESI analyses indicates that by 2024, Pennsylvania would gain the following if a full data center sales and use tax exemption existed:

• Over 33,000 additional total jobs, including 10,000 more jobs in data center sector.
• Over $6 billion more in total output (direct, indirect and induced sales/revenue).
• Over $2 billion more in total wages.
• $110 million more in annual net tax revenues, after accounting for the sales tax exemption.
• Increased county, municipal, and school district property tax revenue.

This expansion of data centers in Pennsylvania would also have additional community and economic impacts, including:

• Diversification of local economies.
• Investments in human capital with high-wage jobs.
• Improvements to electric grid, including in rural areas.
• Innovations in energy efficiency.
• Increased broadband access, including in rural areas.