Incentives, Financing and TaxesTEXAS SALES AND USE TAX EXEMPTION - DATA CENTER « Back to Search Results
Category: Tax, Taxes
A "data center" is a facility of at least 100,000 square feet in Texas that has been, or will be, specifically constructed or refurbished to house servers and related equipment for processing, storing or distributing data. The Comptroller's office may certify single-occupant data centers that meet specific requirements related to capital investment and job-creation as "qualifying data centers." Certain items necessary and essential to the operation of a qualified data center are temporarily exempt from the 6.25 percent state sales and use tax. Local sales taxes are due on purchases of these qualifying items. An owner, operator and/or occupant of a data center can apply to the Comptroller's office for certification of the facility as a qualified data center and for registration as a qualifying owner, qualifying operator or qualifying occupant. Data centers with agreements limiting the appraised value of the data center's property under Tax Code Chapter 313 do not qualify for this exemption. The sales tax exemption for a qualified data center is temporary and lasts for 10 or 15 years beginning on the date the Comptroller's office certifies the data center. The length of the exemption period depends on the amount of capital investment the qualifying owner, operator and occupant make: 10 years from certification date – the qualifying owner, operator or occupant of a data center (either jointly or independently) makes a capital investment of at least $200 million, but less than $250 million within the first five years after certification; 15 years from certification date – the qualifying owner, operator or occupant of a data center (either jointly or independently) makes a capital investment of at least $250 million within the first five years after certification.