HF4173

Purpose

This bill modifies the data center tax policy to define what counts as a “Qualified large-scale data center” for purposes of the data center sales tax exemption, and sets criteria that must be met for a facility (and its tenants) to qualify.

Main Provisions

• Adds a formal definition of a “Qualified large-scale data center.”
• The definition is tied to eligibility for the data center sales tax exemption and references related laws (Minnesota Statutes 216B.02 and 297A.68).
• A qualified facility must be in Minnesota, consist of one or more buildings connected to each other by fiber, and include associated equipment.
• Qualifying facilities must meet the size criterion of at least 25,000 square feet in total, located at one physical location or multiple locations.
• The total cost of construction or refurbishment investment in enterprise information technology equipment and computer software, funded by the facility and its tenants, must reach at least $250,000,000.
• This $250 million investment must be accumulated within a 60-month period beginning after June 1, 2025 (dates and interpretation may be clarified in final drafting).
• The bill references maintaining certain defined terms for other purposes and modifying the data center exemption, indicating changes to how the exemption is administered or applied.

Significant Changes to Existing Law

• Establishes a new qualification standard for the data center sales tax exemption by creating the term “Qualified large-scale data center.”
• Sets a specific monetary threshold ($250,000,000) and a specific investment period (60 months starting after June 1, 2025) as conditions for eligibility.
• Ties the definition to facilities and their tenants, requiring joint investment across the whole data center project.
• Amends multiple statutory provisions (216B.02 and 297A.68) to incorporate this new definition and modify the exemption framework accordingly.

Relevant Terms - Qualified large-scale data center - data center sales tax exemption - Minnesota Statutes 216B.02 - Minnesota Statutes 297A.68 - enterprise information technology equipment - computer software - construction or refurbishment investment - $250,000,000 - 60-month period - June 1, 2025 - buildings connected by fiber - 25,000 square feet - facility and its tenants