Data processing services centers-tax exemptions.

11LSO-0349.L2

FISCAL NOTE

The fiscal impact, in the form of decreased sales and use tax revenues, is indeterminable.

Source of revenue decrease:

Exemption from sales and use tax on qualifying equipment including prewritten computer software, containers used to transport and house computer equipment,  backup power generators, cooling equipment purchased in the initial construction of a data center or replacement of existing equipment when the aggregate annual purchase exceeds $2,000,000 of qualifying equipment and qualifying computer software.  The exemption also includes a three year exemption from power used in operating the data center.

Assumptions:

Because this exemption is based individually on an entity qualifying first as a “data services processing center” and meeting the minimum threshold of $2,000,000 of annual purchases of qualifying equipment including prewritten computer software, it is impossible to estimate the impact on tax revenue. This exemption would be based solely on the size of the data processing center and the annual purchases of qualifying equipment.

Prepared by:   Dean Temte, LSO  Phone: 777-7881

(Information provided by Dan Noble, Dept. of Revenue; 777-5220)