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SF769 (Legislative Session 94 (2025-2026))

Certain data centers tax exemption modification

Related bill: HF1277

AI Generated Summary

Senate File No. 769 is a bill that modifies the tax exemptions for certain types of data centers in Minnesota. The main points covered in the bill are as follows:

  1. Tax Exemptions for Data Centers:

    • Purchases of enterprise information technology equipment and computer software used in qualified, refurbished, or large-scale data centers are tax-exempt.
    • This exemption also covers replacements or upgrades of such equipment and software.
    • For large-scale data centers, the exemption applies at the time of purchase, whereas for other data centers, the tax is initially collected and then refunded.

  2. Definitions and Criteria:

    • Qualified data centers must be at least 25,000 square feet, located in Minnesota, and involve at least $30 million in costs within 48 months.
    • Refurbished data centers must meet similar size requirements but involve at least $50 million in refurbishment costs within 24 months.
    • Large-scale data centers are defined by a higher threshold of $250 million in expenditure and need to meet specific environmental and security standards.

  3. Duration:

    • Data centers can claim tax exemptions for up to 20 years from their first qualifying purchase or until June 30, 2042, whichever comes first.

  4. Certification and Compliance:

    • Data centers must be certified by the commissioner of employment and economic development to ensure they meet all required criteria before they can benefit from exemptions.
    • Large-scale data centers must also prove compliance with sustainability or green building standards within three years of operation.

  5. Labor Standards:

    • Construction and refurbishment work on qualified data centers must comply with prevailing wage rates and other labor standards.

The purpose of the bill is to attract and retain data center businesses in Minnesota by offering fiscal incentives, thereby boosting local employment in construction and technology sectors.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
January 29, 2025HouseFloorActionIntroduction and first reading
January 29, 2025SenateFloorActionIntroduction and first reading
January 29, 2025HouseFloorActionReferred toTaxes
January 29, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Additional details regarding exemption time limits and specific conditions for data center qualifications."
      ],
      "removed": [],
      "summary": "This bill modifies the exemption for certain data centers under section 297A68, subdivision 42.",
      "modified": [
        "Clarification on the definitions and requirements of 'qualified data center', 'qualified refurbished data center', and 'qualified largescale data center'."
      ]
    },
    "citation": "297A68",
    "subdivision": "subdivision 42"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Amendments affecting tax refunds related to sales in data centers under section 297A75, subdivision 1.",
      "modified": [
        "Adjustments in the process of tax refunds following the amendments in 297A68 for data centers."
      ]
    },
    "citation": "297A75",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "Specifies that laborers and mechanics working on data centers must be paid according to prevailing wage standards."
      ],
      "removed": [],
      "summary": "This bill associates work on data centers with prevailing wage rates defined in section 177.42, subdivision 6.",
      "modified": []
    },
    "citation": "177.42",
    "subdivision": "subdivision 6"
  },
  {
    "analysis": {
      "added": [
        "Adds conditions for repayments if sustainable standards are not met by data centers."
      ],
      "removed": [],
      "summary": "This bill modifies conditions under which tax exemption must be repaid for data centers under section 289A38, subdivision 1.",
      "modified": []
    },
    "citation": "289A38",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "Enforcement of labor standards for data center construction."
      ],
      "removed": [],
      "summary": "Linked to enforcement provisions for work on data centers under section 177.27.",
      "modified": []
    },
    "citation": "177.27",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Included in the enforcement provisions for data center construction work under section 177.30.",
      "modified": []
    },
    "citation": "177.30",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Part of the enforcement provisions concerning data center construction under section 177.32.",
      "modified": []
    },
    "citation": "177.32",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Connected to construction and refurbishment regulations for data centers under sections 177.41 to 177.45.",
      "modified": []
    },
    "citation": "177.41 to 177.45",
    "subdivision": ""
  }
]

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