 Barbara Comstock, and advisor to NetChoice, and Bartlett Cleland, the organization’s general counsel and director of strategic initiatives, testify Feb. 27 before the House Taxes Committee for HF1277. The bill would modify current tax exemptions to include “large-scale data centers.” (Photo by Michele Jokinen)
Luring businesses to Minnesota with tax incentives is nothing new. But, if the state starts seeing budget deficits in the coming years, could those tax breaks start looking too generous?
That’s part of the discussion around data centers.
Since 2011, those buildings (or sections thereof) that house a company’s information technology infrastructure have had tax exemptions in Minnesota. For purchases of most equipment and software, sales taxes are paid up front and later refunded. Meanwhile, electricity is exempt at the point of purchase.
But most data centers were considerably smaller in 2011, mostly belonging to businesses specializing in manufacturing, banking and health care. The new, larger data centers being proposed around the state often belong to the technology giants that rule the internet, companies like Google, Amazon, Microsoft and Meta. Should they get the same tax breaks?
Rep. Greg Davids (R-Preston) thinks so.
He sponsors HF1277, which would establish “large-scale data centers” as a new category eligible for the same exemption. It would also make those equipment and software purchases tax-free at the time of purchase (rather than refundable) and stipulate that the expiration date for the current law (2042) doesn’t apply to these new large-scale centers. Read more
WATCH ▶️ Thursday's Taxes Committee hearing on HF1277
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