The bill proposes a sales tax exemption for the construction or remodeling of qualified data centers in Kansas, as well as for the purchase of data center equipment and certain labor costs. To qualify, firms must commit to a minimum investment of $250,000,000 and create at least 20 new jobs within two years of commencing operations. The bill also amends existing sales tax law to adjust the duration of the sales tax exemption based on the level of investment, reducing the exemption period from 15 to 10 years for investments of at least $250,000,000, from 30 to 20 years for investments of at least $500,000,000, and from 60 to 40 years for investments of at least $1,000,000,000. Additionally, it includes provisions for compliance audits and potential revocation of the exemption if firms fail to meet agreed-upon terms.

Moreover, the bill clarifies and expands sales tax exemptions for various nonprofit organizations and specific projects, requiring contractors to obtain exemption certificates and maintain records for audit purposes. It specifies that if materials purchased under these exemptions are not used as intended, the organization will be liable for the sales tax on those materials. The bill also introduces a new exemption for sales related to the construction and operation of qualified data centers by certified firms, repealing a previous statute (K.S.A. 2024 Supp. 79-3606) and establishing that claims for sales tax refunds must be verified and submitted to the director of taxation. Overall, the legislation aims to streamline the process for accessing tax exemptions while ensuring compliance and accountability among contractors and organizations benefiting from these exemptions.

Statutes affected:
As introduced: 79-3606
As Amended by House Committee: 79-3606