A lawsuit has been brought by local taxpayers in Caldwell County, NC, challenging the state’s use of tax incentives to entice Google to set up a server farm there. The action will swing on whether individual taxpayers are legally entitled to challenge tax breaks.
The N.C. Institute for Constitutional Law told three-judge panel at the N.C. Court of Appeals Monday afternoon that under state law they cannot bar the taxpayers it represents from the courthouse, in a bold attempt to overturn a Wake County Superior Court ruling that the taxpayers cannot challenge the law in court.
“How are people going to challenge the acts of government that they feel are unconstitutional if, as taxpayers, the courthouse door is shut?” Bob Orr, the institute’s executive director was quoted as saying.
Google and the state say that the taxpayers have not shown that they were discriminated against, and are urging the appellate court to uphold the original ruling.
The taxpayers feel Google’s tax breaks could lead to higher taxes for individuals. Burley Mitchell, the lawyer for Google, says this complaint is “too vague” to qualify, and added that the tax breaks Google received are no different tax breaks extended to farmers, manufacturers and others by the state.
Exemptions from the state’s retail sales and use tax, worth an estimated $90 million over 30 years, have been approved for Google. In return, Google is committing to building an Internet data center in Lenoir, providing around 210 jobs with an average annual salary of $48,000.
The legal maneuvering is highlighted by the closing of computer maker Dell’s Winston-Salem manufacturing plant and their decision to lay off 905 workers. Dell is having to pay back most of the $280 million in state and local incentives they were offered to locate the plant in Winston-Salem, revealing an interesting counterpoint to the current situation on NC.
The institute’s had formerly challenged Dell’s incentives, but was dismissed by the state Supreme Court.
Tags: data center, Dell, Google, NC, SC