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NC Supreme Court rejects Google incentives lawsuit

RALEIGH — North Carolina’s Supreme Court rejected a lawsuit Friday filed by a few taxpayers who challenged tens of millions of dollars in tax breaks used to lure Google Inc. to Caldwell County.

Justices did not explain their decision that allows a lower ruling to stand. The state Court of Appeals ruled last year that three taxpayers were not adversely affected by the tax breaks, so they could not sue.

“I’m disappointed that the court isn’t going to decide the case,” said Bob Orr, executive director of the North Carolina Institute for Constitutional Law, which argued the case on behalf of the taxpayers. “I think it’s an important issue. It needs to be decided by the state’s highest court.”

By Orr’s reading of the court of appeals ruling, the only people who would even qualify to challenge tax breaks are people who actually receive the tax breaks. Orr has argued that the tax breaks are unfair because it forces other taxpayers to pay more.

Lawyers for Google and the state have argued that the taxpayers failed to show they were discriminated against. An attorney for Google contended that the incentives are no different than a variety of tax breaks given around the state to farmers, manufacturers and others.

In order to lure Google to build an Internet data center in Lenoir, state lawmakers approved exemptions from the state’s retail sales and use tax that could be worth an estimated $90 million over 30 years. The data center was to create up to 210 jobs. One of the center’s buildings has been completed, and Google is working on constructing a second building at the site.

The North Carolina Institute for Constitutional Law previously failed in its bid to reverse incentives given to computer maker Dell Inc. Dell has since decided to shut down its Winston-Salem manufacturing plant and forego some of its incentives.

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