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Saturday, May 23, 2009, 04:45 pm PT (07:45 pm ET)

Apple reportedly building $1 billion server farm

North Carolina's government is reportedly promising tax breaks to Apple in return for building a large server farm, eventually worth $1 billion, within the East coast state.

A "state official" has told the Charlotte Observer that a bill nearing approval that would bend tax rules for a single, unnamed company are actually meant to accommodate a specific Apple project, which might otherwise be located in another state.

The deal would give the tax breaks to companies with a minority market share in North Carolina, but with a disproportionately large amount of property and staff located in the region. Apple would stand to save as much as $46 million in the space of 10 years but, in return, would have to invest $1 billion within nine years and locate itself in one of the state's poorer counties; Catawba and Cleveland counties are on the short list.

North Carolina is facing steep, double-digit unemployment and could thus soften the blow by giving incentives to companies to do business within the state. Google has been operating a server farm of its own in the state since 2008.

Just what this project would entail isn't clear, but legislators supposedly see it in terms of "juicy" long-term rewards that would be worth even timid beginnings. At first, the Apple server farm would need under 100 full-time staff — less than 1 percent of the 35,100 employees the Mac maker relies on today. Server farms are usually intended to handle the very largest sets of data a company has to offer and are often located outside of regular company offices both for size reasons and, sometimes, as a physically separate backup.

Apple hasn't responded to the claims.