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AOL Plans $550 Million Data Center

America Online Inc. plans to build a new $550 million data center in Prince William County, Va.

AOL officials refused to elaborate on the plans, but The Washington Post, citing government officials, said the new center will be built just outside Manassas, Va. and will house a variety of computer equipment, including new technology to distribute video over the Internet.

The company will benefit from new state legislation that exempts Internet companies from paying sales tax on certain servers and other equipment. That tax break was reportedly one of the main reasons Virginia landed the center instead of North Carolina, which was also in the running. The tax breaks are expected to cost the state about $4 million a year.

The project is expected to be formally announced at a March 10 news conference.

Landing the center is a big victory for officials of Prince William County, which has been largely overshadowed by Fairfax and Loudoun counties. Those two counties form the core of Northern Virginia's high-technology industry.

AOL already operates two data centers in Virginia, one in Reston and the other at its Loudoun headquarters.