Oracle got big tax breaks in Texas for Stargate. Now it's going back for more.

Oracle is currently contesting the property valuation of its Stargate data center located in Abilene, Texas, as confirmed by local officials. The tech giant is poised to receive an 85% property tax abatement due to an agreement with the city's economic development corporation. If the property value is reduced alongside this abatement, Oracle's tax obligations could diminish even further. This situation highlights a growing concern regarding the substantial investments made by major technology companies in data centers, which often produce minimal economic benefits for the local communities. In Abilene, the Stargate project, developed by Crusoe, is expected to require an investment of up to $3.5 billion and promises to create 357 new full-time jobs, all in exchange for property tax incentives. As the sub-lessee of the property, Oracle stands to gain significantly from this arrangement. Companies frequently argue that tax incentives are vital to their expansion decisions. Local economic officials contend that any additional revenue generated for municipalities is beneficial, despite the possibility that such income could be higher if tax breaks were not available. Oracle has yet to comment publicly on this matter. Larry Ellison, Oracle’s executive chairman and CTO, is familiar with the process of reducing property tax assessments. In 2008, he successfully advocated for a property value decrease in San Mateo County, which resulted in a $3 million tax break. Local appraisal officials, such as Gary Earnest, expressed little surprise at Oracle's decision to file a protest, noting that this tactic is commonplace, even among firms already benefiting from tax incentives. Texas law permits property owners, including eligible sub-lessees like Oracle, to challenge appraisals. Earnest has appraised the Stargate site at approximately $200 million for the upcoming 2025 tax year. He acknowledged the difficulty in predicting Oracle's tax liabilities without the abatement, given the variability of Texas property tax rates. Taylor County’s auditor, Elijah Anderson, pointed out that over half of the county's new property value this year stemmed from Lancium, the landowner for the Stargate site. He estimated that Taylor County could have anticipated around $3 million in tax revenue from these properties had the valuation not been disputed. With property tax revenue constituting a significant portion of the county's $79 million general fund, even an extra million dollars could contribute to new initiatives, though it wouldn't drastically alter the financial landscape. As discussions around tax incentives and their implications for local economies continue, the outcome of Oracle's appeal remains closely watched.