SF3265

SF3265 (Legislative Session 94 (2025-2026))

Sales and use tax exemption for data centers repeal

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to amend sales and use tax regulations in Minnesota, specifically the repeal of tax exemptions related to data centers. It aims to ensure that certain sales items, previously exempt, are now taxed to align with the typical tax requirements for other purchases.

Main Provisions

Repeal of Exemption: The bill targets the removal of tax exemptions for enterprise information technology equipment and computer software used in qualified data centers. Previously, these were exempt under Minnesota Statutes section 297A.68, subdivision 42.
Amended Tax Collection: Other item exemptions are listed, but with this bill's passage, data centers will no longer enjoy the exemption and must comply with the standard tax rates.

Significant Changes to Existing Law

Elimination of Data Center Tax Exemptions: This bill represents a significant policy shift by removing existing tax exemptions specifically aimed at supporting data centers through reduced financial burdens related to technology and software acquisitions.
Revisions to Statutory Language: Adjustments to sections of Minnesota Statutes are made to reflect these eliminations and ensure uniformity in tax application across different sectors.

Relevant Terms

Sales and use tax
Tax exemption
Data centers
Information technology equipment
Software tax
Repeal
Qualified data center

Bill text versions

Introduction PDF file
Introduction PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
April 02, 2025	Senate	Floor	Action	Introduction and first reading
April 02, 2025	Senate	Floor	Action	Referred to	Taxes
April 02, 2025	Senate	Floor	Action	Referred to	Taxes
April 06, 2025	Senate	Floor	Action	Author stricken
April 06, 2025	Senate	Floor	Action	Author stricken
April 21, 2025	Senate	Floor	Action	Author added
April 21, 2025	Senate	Floor	Action	Author added

Citations

[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Modifies tax collection on sales of specified exempt items under section 297A.75.",
      "modified": [
        "Clarifies which exempt items continue to have sales tax collected as if taxable."
      ]
    },
    "citation": "297A.75",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [
        "Entire subdivision granting exemption for data center purchases."
      ],
      "summary": "Repeals the exemption for data centers under section 297A.68.",
      "modified": []
    },
    "citation": "297A.68",
    "subdivision": "subdivision 42"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to agricultural processing facility building materials.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 13"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to mineral production facilities' building materials.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 14"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to correctional facilities' building materials.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to residences for veterans with a disability.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 11"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to elevators and building materials.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 12"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to materials for qualified low-income housing.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 23"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to municipal electric utility facilities materials and supplies.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 35"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to equipment for electrical energy generation, transmission, and distribution.",
      "modified": []
    },
    "citation": "297A.68",
    "subdivision": "subdivision 37"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to commuter rail vehicle and repair parts.",
      "modified": []
    },
    "citation": "297A.70",
    "subdivision": "subdivision 3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to construction or improvement of projects and facilities.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 40"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to qualifying capital projects.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 44"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to critical access dental services.",
      "modified": []
    },
    "citation": "297A.70",
    "subdivision": "subdivision 7"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to a business subsidy agreement for greater Minnesota.",
      "modified": []
    },
    "citation": "297A.68",
    "subdivision": "subdivision 44"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to constructing or replacing real property.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 49"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to additional construction or replacement in certain areas.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 50"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to further construction or replacement in designated zones.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 51"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to yet more qualifying capital projects.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 52"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References exemption related to constructing, remodeling, or improving fire and police stations.",
      "modified": []
    },
    "citation": "297A.71",
    "subdivision": "subdivision 53"
  }
]