Purchases of server equipment and power infrastructure for use in eligible data centers - sales/use tax exemption

Attention

The department is currently accepting applications for this program. Please see the Special Notice titled Data center exemption and application process for more details.

Availability

Available to the owner and tenants of an eligible data center that has a combined square footage of at least 100,000 square feet and is located in a rural county.

Qualifying activity

To qualify, the data center must have a building permit to construct, renovate, or expand the data center issued during one of the following periods:

• April 1, 2010 to June 30, 2011.
• April 1, 2012 to June 30, 2015.
• July 1, 2015 to June 30, 2025.

Sales/use tax exemption on:

• Purchases of eligible server equipment and labor and services to install server equipment, in an eligible data center.
• Purchases of eligible power infrastructure, and labor and services to construct, install, repair, alter, or improve eligible power infrastructure.

Application process

Review the List of Rural Counties for eligibility.

Submit the Application for Sales Tax Exemption for Purchases by Data Centers before purchasing server equipment or power infrastructure.

Approval and reporting 

• If approved, the department will issue a Certificate for Sales Tax Exemption for Purchases by Data Centers.
• Once approved, you must submit all of the following:
  • The Annual Tax Performance Report by May 31 of the year following any year in which an exemption is taken.
  • The Buyer’s Sales and Use Tax Preference Addendum each tax reporting period on your excise tax return, to disclose how many purchases were made using the exemption certificate.

All documents are required to be submitted electronically.

For questions about the application, call Taxpayer Account Administration at 360-705-6217.