ID H0897

Data centers commencing construction on or after April 1, 2026, will only receive sales tax exemptions for eligible server equipment, not for new data center facility construction costs

New qualifying requirements for data centers starting April 1, 2026: must receive electricity under a rate schedule that fully recovers all utility costs, and must provide written notice to local water providers and the Department of Water Resources detailing anticipated water consumption needs before construction begins

State Tax Commission required to file annual reports starting in 2027 on forgone sales tax revenue, and starting in 2032, five-year reports on jobs created, capital investment, and electricity/water usage impacts on surrounding communities

Property tax exemption for new capital investments exceeding $400 million limited to projects that commenced construction prior to April 1, 2026

Declares an emergency and applies retroactively to January 1, 2026