Present law requires a tax rate of 1.5 percent to be imposed with respect to electricity when sold to or used by a qualified data center. However, no tax is imposed with respect to cooking equipment or backup power infrastructure when sold to or used by a qualified data center. Any qualified data center that applies for a tax credit under existing law must certify on its business plan that it has not, within the previous 12 months, been found to be in violation of certain federal labor and immigration laws. Any qualified data center that fails to provide the required certification does not qualify for job tax credits under existing law.
Present law requires the retail sale, lease, licensing, or use of computer software in this state to be subject to sales and use taxes, regardless of whether the software is delivered electronically, delivered by use of tangible storage media, loaded or programmed into a computer, created on the premises of the consumer or otherwise provided. The tax must be levied on the sales price or purchase price of the computer software at a rate equal to the rate of tax levied on the sale of tangible personal property at retail by existing law.
With respect to a spallation neutron source facility that is funded by the United States government or an instrumentality thereof, not funded with any state funds, and located at a national laboratory, present law requires the following to be exempt from sales and use taxes:
(1) Property that becomes a component part of or is used exclusively in the operation or repair of the facility;
(2) Services, materials, or items furnished or supplied to the facility and used exclusively in the operation of the facility; and
(3) Property, services, building materials, machinery, equipment, supplies, repair parts, replacement materials, or other items used exclusively in the construction, operation, or repair of the facility or its operations.
However, any entity that qualifies for a tax exemption under the above provisions is not eligible for a sales and use tax exemption with regard to any industrial machinery that is used in the operation of a qualified data center or used primarily for research and development; however, this provision does not apply to a leadership computing facility that is funded by the United States government or an instrumentality thereof, not funded with any state funds, and located at a national laboratory.
DEFINITION OF QUALIFIED DATA CENTER
Present law provides that a "qualified data center," as used in the provisions above, means a data center that made a required capital investment in excess of $100,000,000 during an investment period not to exceed three years that creates at least 15 net new full-time employee jobs during the investment period paying at least 150 percent of the states' average occupation wage.
This bill expands on the definition of what constitutes a qualified data center by including a data center that previously made the required capital investment in excess of $100,000,000 and creates at least 15 net new full-time employee jobs upon the data center being transferred to an affiliate pursuant to a corporate reorganization under the Internal Revenue Code.
ON APRIL 4, 2024, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 2182, AS AMENDED.
AMENDMENT #1 revises the bill to, instead, provide that a "qualified data center" includes a data center that previously made the required capital investment in excess of $100 million and previously created at least 15 net new full-time employee jobs and the data center is transferred to an affiliate pursuant to a corporate reorganization under the Internal Revenue Code.

Statutes affected:
Introduced: 67-6-102(81), 67-6-102
Amended with HA0666 -- 04/04/2024: 67-6-102(81), 67-6-102