Bill Text: TX HB2482 | 2023-2024 | 88th Legislature | Introduced
Bill Title: Relating to the temporary exemption of certain tangible personal property related to data centers from the sales and use tax.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2023-03-27 - Left pending in committee [HB2482 Detail]
Download: Texas-2023-HB2482-Introduced.html
By: Capriglione | H.B. No. 2482 |
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relating to the temporary exemption of certain tangible personal | ||
property related to data centers from the sales and use tax. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle H, Chapter 151.359 Subsections (a) (b) | ||
(d) (e) and (f), Tax Code are amended to read as follows: | ||
Sec. 151.359. PROPERTY USED IN CERTAIN DATA CENTERS; | ||
TEMPORARY EXEMPTION. (a) In this section: | ||
(1) "County average weekly wage" means the average | ||
weekly wage in a county for all jobs during the most recent four | ||
quarterly periods for which data is available, as computed by the | ||
Texas Workforce Commission, at the time a data center creates a job | ||
used to qualify under this section. | ||
(2) "Data center" means at least 100,000 square feet | ||
of space in one or more buildings [ |
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be located on a single parcel of land or on contiguous or | ||
noncontiguous parcels of land [ |
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(A) [ |
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(B) [ |
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and actually used primarily to house servers and related equipment | ||
and support staff for the processing, storage, and distribution of | ||
data; | ||
(C) [ |
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qualifying occupants [ |
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distribution of data; | ||
(D) [ |
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telecommunications provider to place tangible personal property | ||
that is used to deliver telecommunications services; [ |
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(E) has an uninterruptible power source, | ||
[ |
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sophisticated fire suppression and prevention system, and enhanced | ||
physical security that includes restricted access, video | ||
surveillance, and electronic systems; and | ||
(F) noncontiguous parcels must be located in the | ||
same county or an adjacent county and connected by fiber and | ||
associated equipment required for operating a fiber transmission | ||
network between data center buildings or parcels and for the sole | ||
use of the qualifying occupants or their agent(s). | ||
(3) "Permanent job" means an employment position that | ||
will exist for at least five years after the date the job is | ||
created. | ||
(4) "Qualifying data center" means a data center that | ||
meets the qualifications prescribed by Subsection (d). | ||
(5) "Qualifying job" means a full-time, permanent job | ||
that pays at least 120 percent of the county average weekly wage in | ||
the county in which the data center position [ |
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[ |
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third-party employer if a written contract exists between the | ||
third-party employer and a qualifying owner, qualifying operator, | ||
or qualifying occupant that provides that the employment position | ||
is [ |
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(6) "Qualifying operator" means a person who controls | ||
access to a qualifying data center, regardless of whether that | ||
person owns each item of tangible personal property located at the | ||
qualifying data center. A qualifying operator may also be the | ||
qualifying owner. | ||
(7) "Qualifying owner" means a person who owns the | ||
building or buildings in which a qualifying data center is located. | ||
A qualifying owner may also be the qualifying operator. | ||
(8) "Qualifying occupant" means a person who: | ||
(A) contracts with a qualifying owner or | ||
qualifying operator to place, or cause to be placed, and to use | ||
tangible personal property at the qualifying data center; or | ||
(B) in the case of a qualifying occupant who is | ||
also the qualifying owner and the qualifying operator, places or | ||
causes to be placed, and uses tangible personal property at the | ||
qualifying data center. | ||
(b) Except as otherwise provided by this section, tangible | ||
personal property that is necessary and essential to the operation | ||
of a qualified data center is exempted from the taxes imposed by | ||
this chapter if the tangible personal property is purchased for | ||
installation at, incorporation into, or in the case of Subdivision | ||
(1), use in a qualifying data center by a qualifying owner, | ||
qualifying operator, or qualifying occupant, and the tangible | ||
personal property is: | ||
(1) electricity; | ||
(2) an electrical system; | ||
(3) a cooling system; | ||
(4) a backup electricity generation system [ |
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(5) hardware or a distributed mainframe computer or | ||
server; | ||
(6) a data storage device; | ||
(7) network connectivity equipment; | ||
(8) a rack, cabinet, and raised floor system; | ||
(9) a peripheral component or system; | ||
(10) software; | ||
(11) a mechanical, electrical, or plumbing system that | ||
is necessary to operate any tangible personal property described by | ||
Subdivisions (2)-(10); | ||
(12) any other item of equipment or system necessary | ||
to operate any tangible personal property described by Subdivisions | ||
(2)-(11), including a fixture; and | ||
(13) a component part of any tangible personal | ||
property described by Subdivisions (2)-(10). | ||
(d) Subject to Subsection (k), a data center may be | ||
certified by the comptroller as a qualifying data center for | ||
purposes of this section if, on or after September 1, 2013: | ||
(1) one or more [ |
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[ |
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(A) contract [ |
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or qualifying operator to lease or license via service agreement | ||
space in which at least one [ |
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data center; [ |
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(B) occupy [ |
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previously used as a data center in which at least one [ |
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qualifying occupant will locate a data center[ |
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(C) refurbish a space in which at least one | ||
qualifying occupant will locate a data center; and | ||
(2) the qualifying owner, qualifying operator, or | ||
qualifying occupant or occupants, jointly or independently: | ||
(A) create [ |
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All qualifying jobs must be located in the county or counties in | ||
which the data center is located.[ |
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from one county in this state to another county in this state may | ||
not be included; and | ||
(B) make [ |
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capital investment, on or after September 1, 2013, of at least $200 | ||
million in that particular data center over a five-year period | ||
beginning on the date the data center is certified by the | ||
comptroller as a qualifying data center. | ||
(e) A data center that is eligible under Subsection (d) to | ||
be certified by the comptroller as a qualified data center shall | ||
apply to the comptroller for certification as a qualifying data | ||
center and for issuance of a registration number or numbers by the | ||
comptroller. The application must be made on a form prescribed by | ||
the comptroller and include the information required by the | ||
comptroller. The application must include the name and contact | ||
information for the qualifying occupant and, if applicable, the | ||
name and contact information for the qualifying owner and the | ||
qualifying operator who will claim the exemption authorized under | ||
this section. The application form must include a section for the | ||
applicant to certify that the capital investment required by | ||
Subsection (d)(2)(B) will be met independently or jointly by the | ||
qualifying occupant or occupants, qualifying owner, or qualifying | ||
operator within the time period prescribed by that subsection | ||
[ |
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(f) The exemption provided by this section begins on the | ||
date the data center is certified by the comptroller as a qualifying | ||
data center and expires: | ||
(1) on the 10th anniversary of that date, if the | ||
qualifying occupant or occupants, qualifying owner, or qualifying | ||
operator independently or jointly makes a capital investment of at | ||
least $200 million but less than $250 million as provided by | ||
Subsection (d)(2)(B); or | ||
(2) on the 15th anniversary of that date, if the | ||
qualifying occupant or occupants, qualifying owner, or qualifying | ||
operator independently or jointly makes a capital investment of | ||
$250 million or more as provided by Subsection (d)(2)(B). | ||
SECTION 2. Subtitle H, Chapter 151.3595 Subsections (a) (b) | ||
(d) (e) and (f), Tax Code are amended to read as follows: | ||
Sec. 151.3595. PROPERTY USED IN CERTAIN LARGE DATA CENTER | ||
PROJECTS; TEMPORARY EXEMPTION. (a) In this section: | ||
(1) "County average weekly wage" means the average | ||
weekly wage in a county for all jobs during the most recent four | ||
quarterly periods for which data is available, as computed by the | ||
Texas Workforce Commission, at the time a large data center project | ||
creates a job used to qualify under this section. | ||
(2) "Large data center project" means a project that: | ||
(A) is located in this state; | ||
(B) is composed of one or more buildings | ||
comprising at least 250,000 square feet of space located or to be | ||
located on one or more [ |
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noncontiguous parcels of land that are commonly owned or owned by | ||
affiliation with the qualifying operator; | ||
(C) is specifically constructed or refurbished | ||
and actually used primarily to house servers and related equipment | ||
and support staff for the processing, storage, and distribution of | ||
data; | ||
(D) is used by one or more [ |
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occupants or operators [ |
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distribution of data; | ||
(E) is not used primarily by a telecommunications | ||
provider to place tangible personal property used to deliver | ||
telecommunications services; |
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(F) has an uninterruptible power source, [ |
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backup electricity generation system [ |
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suppression and prevention system, and physical security that | ||
includes restricted access, video surveillance, and electronic | ||
systems; and | ||
(G) may include noncontiguous parcels only if the | ||
noncontiguous parcels are located in the same or adjacent county | ||
and connected by fiber and associated equipment required for | ||
operating a fiber transmission network between data center | ||
buildings or parcels and for the sole use of the qualifying | ||
occupants or their agent(s). | ||
(3) "Permanent job" means an employment position that | ||
will exist for at least five years after the date the job is | ||
created. | ||
(4) "Qualifying job" means a full-time, permanent job | ||
that pays at least 120 percent of the county average weekly wage in | ||
the county in which the large data center project position [ |
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located [ |
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staffed by a third-party employer if a written contract exists | ||
between the third-party employer and a qualifying owner, qualifying | ||
operator, or qualifying occupant that provides that the employment | ||
position is [ |
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large data center project. | ||
(5) "Qualifying large data center project" means a | ||
large data center project that meets the qualifications prescribed | ||
by Subsection (d). | ||
(6) "Qualifying operator" means a person who controls | ||
access to a qualifying large data center project, regardless of | ||
whether that person owns each item of tangible personal property | ||
located at the qualifying large data center project. A qualifying | ||
operator may also be the qualifying owner. | ||
(7) "Qualifying owner" means a person who owns a | ||
building in which a qualifying large data center project is | ||
located. A qualifying owner may also be the qualifying operator. | ||
(8) "Qualifying occupant" means a person who: | ||
(A) contracts with a qualifying owner or | ||
qualifying operator to place, or cause to be placed, and to use | ||
tangible personal property at the qualifying large data center | ||
project; or | ||
(B) in the case of a qualifying occupant who is | ||
also the qualifying owner and the qualifying operator, places or | ||
causes to be placed and uses tangible personal property at the | ||
qualifying large data center project. | ||
(b) Except as otherwise provided by this section, tangible | ||
personal property that is necessary and essential to the operation | ||
of a qualifying large data center project is exempted from the taxes | ||
imposed by this chapter if the tangible personal property is | ||
purchased for installation at, incorporation into, or in the case | ||
of electricity, use in a qualifying large data center project by a | ||
qualifying owner, qualifying operator, or qualifying occupant, and | ||
the tangible personal property is: | ||
(1) electricity; | ||
(2) an electrical system; | ||
(3) a cooling system; | ||
(4) a backup electricity generation system [ |
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(5) hardware or a distributed mainframe computer or | ||
server; | ||
(6) a data storage device; | ||
(7) network connectivity equipment; | ||
(8) a rack, cabinet, and raised floor system; | ||
(9) a peripheral component or system; | ||
(10) software; | ||
(11) a mechanical, electrical, or plumbing system that | ||
is necessary to operate any tangible personal property described by | ||
Subdivisions (2)-(10); | ||
(12) any other item of equipment or system necessary | ||
to operate any tangible personal property described by Subdivisions | ||
(2)-(11), including a fixture; and | ||
(13) a component part of any tangible personal | ||
property described by Subdivisions (2)-(10). | ||
(d) Subject to Subsection (j), a large data center project | ||
may be certified by the comptroller as a qualifying large data | ||
center project for purposes of this section if, on or after June 1, | ||
2015: | ||
(1) one or more [ |
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[ |
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(A) contract [ |
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or qualifying operator to lease, license, or enter into a service | ||
agreement for space in which at least one [ |
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will locate a large data center project; [ |
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(B) occupy [ |
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previously used as a data center in which at least one [ |
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qualifying occupant will locate a large data center project, if at | ||
least one [ |
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(c) refurbishes a space in which at least one | ||
qualifying occupant will locate a large data center project, if at | ||
least one of the qualifying occupants is also the qualifying | ||
operator and the qualifying owner; and | ||
(2) the qualifying owner, qualifying operator, or | ||
qualifying occupant or occupants, independently or jointly: | ||
(A) create [ |
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All jobs must be in the county or counties in which the large data | ||
center project is located.[ |
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one county in this state to another county in this state may not be | ||
included; | ||
(B) on or after May 1, 2015, make [ |
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[ |
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that particular large data center project, the amount of which may | ||
not include a capital investment to replace personal property | ||
previously placed in service in that large data center project, | ||
over a five-year period beginning on the earlier of: | ||
(i) the date the large data center project | ||
submits the application described by Subsection (e); or | ||
(ii) the date the large data center project | ||
is certified by the comptroller as a qualifying large data center | ||
project; and | ||
(C) agrees to contract for at least 20 megawatts | ||
of transmission capacity for operation of the large data center | ||
project. | ||
(e) A large data center project that is eligible under | ||
Subsection (d) to be certified by the comptroller as a qualifying | ||
large data center project shall apply to the comptroller for | ||
certification and for the issuance of a registration number or | ||
numbers by the comptroller. The application must be made on a form | ||
prescribed by the comptroller and must include the information | ||
required by the comptroller. The application must include the name | ||
and contact information for each [ |
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applicable, the name and contact information for the qualifying | ||
owner and the qualifying operator who will claim the exemption | ||
authorized under this section. The application form must include a | ||
section for the applicant to certify that the capital investment | ||
required by Subsection (d)(2)(B) will be met independently or | ||
jointly by the qualifying occupant or occupants, qualifying owner, | ||
or qualifying operator within the time period prescribed by that | ||
subsection [ |
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(f) The exemption provided by this section begins on the | ||
date the large data center project is certified by the comptroller | ||
as a qualifying large data center project and expires on the 20th | ||
anniversary of that date, if the qualifying occupant or occupants, | ||
qualifying owner, or qualifying operator, independently or jointly | ||
makes the capital investment of at least $500 million as provided by | ||
Subsection (d)(2)(B). | ||
SECTION 3. The change in law made by this Act does not | ||
affect tax liability accruing before the effective date of this | ||
Act. That liability continues in effect as if this Act had not been | ||
enacted, and the former law is continued in effect for the | ||
collection of taxes due and for civil and criminal enforcement of | ||
the liability for those taxes. | ||
SECTION 4. This Act takes effect September 1, 2023. |