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SF769 (Legislative Session 94 (2025-2026))

Certain data centers tax exemption modification

Related bill: HF1277

AI Generated Summary

Senate File No. 769 is a bill that modifies the tax exemptions for certain types of data centers in Minnesota. The main points covered in the bill are as follows:

  1. Tax Exemptions for Data Centers:

    • Purchases of enterprise information technology equipment and computer software used in qualified, refurbished, or large-scale data centers are tax-exempt.
    • This exemption also covers replacements or upgrades of such equipment and software.
    • For large-scale data centers, the exemption applies at the time of purchase, whereas for other data centers, the tax is initially collected and then refunded.

  2. Definitions and Criteria:

    • Qualified data centers must be at least 25,000 square feet, located in Minnesota, and involve at least $30 million in costs within 48 months.
    • Refurbished data centers must meet similar size requirements but involve at least $50 million in refurbishment costs within 24 months.
    • Large-scale data centers are defined by a higher threshold of $250 million in expenditure and need to meet specific environmental and security standards.

  3. Duration:

    • Data centers can claim tax exemptions for up to 20 years from their first qualifying purchase or until June 30, 2042, whichever comes first.

  4. Certification and Compliance:

    • Data centers must be certified by the commissioner of employment and economic development to ensure they meet all required criteria before they can benefit from exemptions.
    • Large-scale data centers must also prove compliance with sustainability or green building standards within three years of operation.

  5. Labor Standards:

    • Construction and refurbishment work on qualified data centers must comply with prevailing wage rates and other labor standards.

The purpose of the bill is to attract and retain data center businesses in Minnesota by offering fiscal incentives, thereby boosting local employment in construction and technology sectors.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
January 29, 2025SenateFloorActionIntroduction and first reading
January 29, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Clarification on the scope and criteria for qualified data centers, refurbished data centers, and large-scale data centers."
      ],
      "removed": [
        "Certain criteria for refurbishment that no longer qualify for exemptions."
      ],
      "summary": "This bill modifies the sales and use tax exemption for certain data centers under section 297A.68, subdivision 42.",
      "modified": [
        "Adjustment of definitions and qualifications for data center exemptions, including square footage requirements and investment thresholds."
      ]
    },
    "citation": "297A.68, subdivision 42"
  },
  {
    "analysis": {
      "added": [
        "New procedures for obtaining a refund based on compliance certifications."
      ],
      "removed": [
        "Previous refund procedures that did not require detailed certification."
      ],
      "summary": "The bill alters procedures for tax refunds related to data centers under section 297A.75.",
      "modified": [
        "Updates to the manner and requirements for claiming tax refunds after qualifying purchases."
      ]
    },
    "citation": "297A.75"
  },
  {
    "analysis": {
      "added": [
        "Specifics on prevailing wage rate applications for data center construction."
      ],
      "removed": [],
      "summary": "References prevailing wage rate requirements for construction work defined under section 177.42, subdivision 6.",
      "modified": []
    },
    "citation": "177.42, subdivision 6"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Enforcement provisions for labor standards and prevailing wage for data center construction under section 177.27.",
      "modified": []
    },
    "citation": "177.27"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Records and compliance requirements for wage payment under section 177.30.",
      "modified": []
    },
    "citation": "177.30"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Prohibitions against retaliatory practices by employers under section 177.32.",
      "modified": []
    },
    "citation": "177.32"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Related sections establishing prevailing wage laws and principles under sections 177.41 to 177.45.",
      "modified": []
    },
    "citation": "177.41 to 177.45"
  },
  {
    "analysis": {
      "added": [
        "Conditions under which exemption amounts must be repaid."
      ],
      "removed": [],
      "summary": "Repayment obligations for tax benefits under certain circumstances are modified, referencing section 289A.38, subdivision 1.",
      "modified": []
    },
    "citation": "289A.38, subdivision 1"
  }
]

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