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Google sued over North Carolina tax exemptions

Lawsuit claims tax exemptions to Google in North Carolina violate state's constitution.

It's pretty common for large companies to get tax breaks and other incentives to expand their operations in U.S. cities and states. Apparently, things aren't going so well for Google in North Carolina though.

First, there was the charge that the search giant tried to silence North Carolina politicians as the parties negotiated the deal. Under the agreement, Google will invest around $600 million and employ more than 200 people in a data center in Lenoir in exchange for tax breaks worth at least $89 million over 30 years.

Now, a libertarian advocacy group is challenging those incentives and suing Google.

The North Carolina Institute for Constitutional Law says a state law designed to give Google tax exemptions, as well as a $4.8 million state Job Development Investment Grant given to the Web giant, violate various provisions of the state Constitution, according to the Triangle Business Journal.

The plaintiff previously sued to block more than $200 million in incentives to lure Dell to Winston-Salem, but the case was dismissed and the ruling has been appealed, the report said.

Asked to comment on the lawsuit, a Google spokesman e-mailed this statement: "We believe the lawsuit is without merit and we will defend against it vigorously. While the courts decide, we will continue with construction, hiring, and the planning of our future in North Carolina."