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N.C. SC says Google tax break was OK

By Jessica M. Karmasek | Feb 7, 2011

RALEIGH, N.C. (Legal Newsline) - The North Carolina Supreme Court has upheld a lower court's ruling that three taxpayers weren't hurt by tax breaks used to lure search engine giant Google Inc. to the state.

The taxpayers had argued that the incentives, approved in 2006 by the state Legislature to attract the company, violated North Carolina's constitution.

According to local television station WRAL, lawmakers had agreed to exempt large Internet data centers from sales and use taxes -- only if Google would build a "server farm" in the state.

Combined state and local tax breaks, the television station reported in 2009, were worth more than $200 million.

Google's lawyers had argued the taxpayers didn't have any standing.

The state's high court, in its two-page per curiam decision filed Thursday, didn't give a reason for the decision.

The lawsuit was filed by the North Carolina Institute for Constitutional Law. The institute's executive director, Bob Orr, told The Associated Press he was "disappointed" that the Court won't issue a full ruling.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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