This session, Florida approved legislation that provides for a sales tax exemption for data centers and goes into effect on July 1, 2017. The exemption eliminates sales and use taxes for infrastructure, equipment, personal property, software, and electricity used exclusively at a data center.
In order to qualify for the exemption, there must be a minimum cumulative capital investment of $150 million and the data center must have a critical IT load of 15 MW or higher.
- Capital Investment. After July 1, 2017, a minimum capital investment of $150 million must be made at the data center by the owner and tenants cumulatively. Qualifying investment may be attributable to acquisition and construction costs as well as expenses related to equipping or expanding a data center. However, capital investment does not include any expenses incurred in the acquisition of facilities which were operated as a data center at the time of acquisition or within 6 months before the acquisition. Property owners have until June 30, 2022 to begin construction of a data center to take advantage of the tax exemption.
- Critical IT Load. The data center must have a total critical IT load of 15MW or higher, and a critical IT load of 1MW or higher dedicated to each individual owner or tenant operating within the data center.
There is no limitation on the duration of the exemption so long as the data center provides minimal reporting to the Florida Department of Revenue every five years to assure continued qualification.
The legislation does contain a claw back provision, if the requirements are not met in their entirety.
In addition to the exemption on purchases of electricity, Florida has a tool in its regulated electric utility arsenal to help attract a large industrial customer consuming a minimum of 2MW. Large users with suitable load profiles may enter into a commercial/industrial service rider agreement (CISR) to offer more aggressive utility rates.
The text of the bill can be found here.