IA HF2688

Data center businesses claiming sales tax exemptions or sales and use tax refunds must invest a minimum of 5% of the aggregate value of those tax benefits from the previous calendar year by the end of each calendar year.

Required investments must be made as equity investments in either a qualifying business under section 15E.28 or an innovation fund under section 15E.52.

The Iowa Economic Development Authority will verify compliance, and the Department of Revenue will annually provide the aggregate value of exemptions and refunds claimed based on data center business annual reports.

Non-compliant data centers face registration cancellation with the Department of Revenue, loss of eligibility for future sales tax exemptions, and must repay the full aggregate amount of exemptions and refunds claimed for the non-compliant year.

Annual reporting requirements expand beginning January 31, 2027, to include aggregate sales price of exempt property purchased and sales/use tax refund amounts from the previous calendar year.