ID H0820

Data centers commencing construction on or after April 1, 2026, will only receive sales tax exemptions for eligible server equipment, no longer for new data center facilities (buildings)

New qualifying requirements for data centers receiving exemptions after April 1, 2026: must use electricity rate schedules that fully recover utility costs, and must provide written notice to local water providers and the Department of Water Resources detailing anticipated water consumption needs

Taxpayers receiving the data center sales tax exemption (Section 63-3622VV) for projects starting after April 1, 2026, cannot also claim the property tax exemption for new capital investments (Section 63-4502), and vice versa

State Tax Commission must file annual reports starting in 2027 on forgone sales tax revenue, and every five years starting in 2032 must report on jobs created, capital invested, and electricity and water usage impacts on surrounding communities

Act declared an emergency and takes effect April 1, 2026