North Dakota considers tax break for data centers

House passes sales tax exemption bill for equipment and software

18 February 2015 by Drew Amorosi - Datacenter Dynamics

North Dakota considers tax break for data centers
Thinkstock / sakakawea7

The North Dakota House of Representatives passed a sales tax exemption bill last Thursday that would allow the tax free purchase of equipment and software for use in data centers within the state. The bill passed the House by a 64 to 27 vote and must now await consideration by the state’s senate.

According to a report by local news site InForum, the bill is meant to attract more data centers to North Dakota. The bill passed last week was amended from its original version to limit the tax emption to the first four data centers that apply and are certified by the state’s tax commissioner’s office.

"With it only limited to four, should it become law, we believe there may be a rush of a few data centers", the bill's primary sponsor, Rep. Mark Owens (R-Grand Forks), told the news site.~

New and refurbished
If enacted, the bill will apply to new and refurbished data centers, although refurbished facilities must meet certain criteria to qualify. All parties seeking the tax exemption at the time of purchase will need to have it previously approved by the state’s tax commissioner. Organizations can also apply to have equipment or software taxes refunded if they were installed by a contractor after purchase, as prescribed by the state’s tax commissioner.

Many US states continue to enact and refine incentives to locate or re-located data centers within their borders. Arizona, Virginia, Texas, and Nebraska are just a few that offer breaks or abatements on anything from property taxes to exemptions on retail tax purchases. According to a recent analysis by CBRE, North Dakota is already one of 38 states nationwide that provide such tax incentives to data center operators.

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