SB 1398 Summary

• Moves the transaction privilege tax (TPT) deduction for computer data center equipment from retail classification exclusions (42-5061 subsection A) to manufacturing/industrial deductions (42-5061 subsection B) and similar changes in use tax provisions (42-5159).

• Allows computer data center owners, operators, and qualified colocation tenants to potentially claim both the specific data center equipment deduction and the independent functional utility deduction in prime contracting, expanding available tax benefits.

• Clarifies that the definition of "computer data center equipment" includes items used for transformation, distribution, management of electricity, cooling systems, water conservation, software, monitoring, and modular data centers at certified facilities.

• Applies retroactively to taxable periods beginning from and after September 12, 2013, with a $10,000 aggregate cap on refund claims filed between December 31, 2020 and December 31, 2021.

• Contains a nonseverability clause making the entire act void if any portion is invalidated, and is conditioned on the effective date prescribed by Laws 2018, chapter 263, section 5.