In a move to attract and to retain data centers and other high-tech companies, the Missouri General Assembly just passed House Bill 2 in a Special Session. This makes Missouri one of the few states that has this type of exemption. From recall, i believe that NY, VA, WA and GA also have some type of data center exemption once certain limits are met. This bill provides a very wide rage of sales tax exemptions for new and for expanded data centers. Here a some of the bill’s highlights:
1. Applies to new or expanded data centers in Missouri after 8-28-10
2. New facilities must apply to department of economic development and receive conditional approval for exemption
3. New facilities must spend $5 million over a 36 month period to get exemption. Once amount is spent, DOR will give refund.
4. Includes cost of equipment, building supplies, used to build or remodel the center
5. Applies to electrical and telecommunications cost
6. For expanded facilities, companies must spend $1 million more than the average spend for past 3 years (or available years if less than 3)
7. Must apply for conditional approval and get refund of tax once paid.
This sounds like a very attractive offer but the bill seems to lack clarity on a couple of points.
1. What about leased hardware? How is that to be valued for purposes of meeting the investment test.
2. There is no real definition of the terms “machinery, equipment and computers” so that will need to be clarified in regulation.
3. There is no mention of software to run the equipment. I’m hopeful that is exempt as well as maintenance agreements
If you are planning any type of data center investment you may want to consider Missouri. If you already have a data center in the state, this may be a good way to get some savings for future investment.
Missouri Exemption for High-Tech Equipment