Microsoft Quiet on 1% Data Center Fair Share

A data center fair share agreement has been sitting on Microsoft's desk since May. So far? Nothing. The company hasn't said yes, no, or maybe, and a coalition of about 25 congregations and community organizations in St. Joseph County, Indiana, known as We Make Indiana, sent the tech giant a proposal asking it to negotiate a binding agreement tied to its sprawling hyperscaler in Granger. The idea is simple on its face. Microsoft would route a small slice of its annual data center costs into a community fund every year. But it's gone quiet since receiving it. And they're still waiting.

Microsoft's Good Neighbor Pitch Meets a Real Ask

Microsoft has spent all year telling host communities it intends to be a good neighbor. It's a simple pitch. The company's public materials promise property taxes that support hospitals, schools, parks, and libraries, plus investment in what it calls vital services the community cares about, and it has sent liaisons into towns to learn what those needs are. But when residents push past the campaign language, the answers get thin.

At community meetings, Microsoft representatives have appeared unprepared. They can't field questions beyond the good neighbor talking points. The company has even acknowledged in public-facing documents that matching employee donations, which totaled $229 million across 29,000 nonprofits in 2024, is not enough, and that admission sits there in writing for anyone to read. What more substantial local investment looks like remains vague.

That vagueness is where the 1% data center fair share proposal comes in. We Make Indiana initially considered asking for as little as 1 or 2 percent, estimating that even a 1 percent contribution could add roughly $30 million to $40 million annually to community programs, though they're not locked into that range. Instead of naming a hard figure, the group asked Microsoft to assess what percentage would be fair. So they don't have a number.

What the Granger Project Looks Like Up Close

The Granger data center sits on 900 acres in St. Joseph County. Ryan Juskus, a leader with We Make Indiana, believes northern Indiana has taken on a unique significance in Microsoft's eyes. In other words, the region sits in a data center sweet spot.

The community around it feels no upside. Last year, Indiana passed a property tax savings bill that reportedly hamstrung local governments' ability to raise revenue for community services. The services deteriorated. We Make Indiana spent the past six months trying to alert Microsoft to urgent needs in health care, child care, elder care, transportation, and affordable housing. But the group learned from a company liaison that Microsoft would approve only a series of one-time nonprofit donations totaling up to $1 million. It's not a fix.

We Make Indiana does not consider that proportionate to the tax savings or improved profit margins Microsoft will get from operating the Granger hyperscaler.

The Tax Breaks That Make the Math Lopsided

Data center developers get tax breaks. Huge ones. Across 38 states, they're pulling in an estimated hundreds of millions in state-level tax breaks, and those exemptions often last more than a decade. Georgia offers a stark example. A recent audit found the state gave up $474 million in sales taxes in one year and got back just $41 million from the industry. And journalist Ronan Farrow noted that by the state's own estimate, 70 percent of the data center construction would have happened anyway, which means we've got a situation where states are handing over cash for something that don't even need the money to get built.

In Indiana, big firms buy equipment tax free. Microsoft and others don't pay the state's 7 percent sales tax on data center gear, and that one exemption could cover as much as $13.2 billion in projected equipment purchases over the years. That's a lot of money. Without the break, up to $900 million could have been added to the tax base supporting state programs, according to an estimate by Indy Mirror. And it's built to last. The exemption can run for 50 years.

• Georgia: $474 million in forgone sales taxes versus $41 million returned in a single year.
• Indiana: a 7 percent sales tax exemption on equipment, potentially covering $13.2 billion in purchases.
• Indiana: the same exemption can run for half a century.

Against that backdrop, a $1 million one-time donation round does not read like partnership. It reads like a rounding error.

A Proposal Microsoft Has Not Answered

We Make Indiana sent its plan to Microsoft's liaison in May. That's it. The group framed it as a concept, not a demand, and they asked for negotiation rather than a top-down arrangement, because they don't want a deal that's simply handed to them from above without any real say.

Where the Silence Leaves South Bend

A Microsoft spokesperson called the proposal an important part of the company's community listening process. But it's too early to discuss. Microsoft is still engaging other community leaders. The spokesperson added that Microsoft remains committed to developing the Granger project in partnership with the community, and that investment decisions have not yet been made at this early stage, which is why the company says it can't say more right now.

Some grants have already gone out. Microsoft approved some initial grants.

What Comes Next for the 1% Data Center Fair Share

We Make Indiana hopes to highlight the contrast between developer tax breaks and cuts to basic services like health care.

A closer parallel than federal ideas sits in Pennsylvania, where Democratic state Sen. Lindsey M. Williams introduced the Data Center Fair Share Act. That bill would require developers to enter legally binding community benefits agreements and share at least 10 percent of a project's total cost with a fund targeting workforce development, environmental improvements, public safety, infrastructure, affordable housing, and energy consumption. Juskus thinks 10 percent is very much on the high end. His group's ask started far lower.

For now, the data center fair share idea remains unanswered in Indiana.