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SF4203 (Legislative Session 94 (2025-2026))

Exemption of data centers modification for sales and use tax

Related bill: HF4173

AI Generated Summary

Purpose

This bill changes how Minnesota handles the sales and use tax exemption for data centers. It adds a formal definition of what counts as a “qualified large-scale data center” so only certain projects can benefit from the exemption. The definition ties to an existing state law and sets specific size and investment criteria.

Main provisions

  • Adds a new subdivision (Subd. 12) to Minnesota Statutes 216B.02 to define “Qualified large-scale data center.”
  • The definition references the meaning in section 297A.68 subdivision 42 paragraph e and sets criteria for a Minnesota facility to qualify:
    • The facility can be one building or multiple buildings that are connected to each other by fiber and related equipment.
    • The total physical space is at least 25,000 square feet.
    • The buildings are located in one physical location or in multiple locations within Minnesota.
    • The total cost of construction or refurbishment investments in enterprise information technology equipment and computer software is at least $250,000,000, counted together for the facility and its tenants.
    • This investment must occur within a 60-month period beginning after June 1, 2025.
  • The new definition is linked to how the data center exemption is applied, aligning with the referenced section of the broader data center law.

Effective date and scope

  • The investment and qualification criteria take effect for projects beginning after June 1, 2025.
  • The 60-month measurement window applies to the total investment by the facility and its tenants for qualifying equipment and software.
  • Applies to data centers located in Minnesota and affects how the exemption is granted based on the new eligibility standard.

Significant changes to existing law

  • Creates a precise, numeric threshold for qualification (25,000+ square feet and $250 million in IT equipment and software investments within 60 months).
  • Requires the data center exemption to be evaluated against the new “Qualified large-scale data center” definition, which is tied to section 297A.68 subdivision 42 paragraph e.
  • Adds clarity to what counts toward the exemption, including investments by both the facility and its tenants.

Notes on terminology

  • Key terms used or defined by the bill: qualified large-scale data center, data center, sales and use tax exemption, enterprise information technology equipment, computer software, construction or refurbishment investment, fiber, Minnesota facility, tenants, 60-month period, June 1, 2025.
  • Related concepts: exemption eligibility, Minnesota Statutes 216B.02, Minnesota Statutes 2025 Supplement, section 297A.68 subdivision 42 paragraph e.

Relevant Terms - Qualified large-scale data center - data center - sales and use tax exemption - enterprise information technology equipment - computer software - construction or refurbishment investment - 250,000,000 dollars - 60-month period - fiber - buildings connected by fiber - Minnesota facility/tenants - Minnesota Statutes 216B.02 - Minnesota Statutes 2025 Supplement - section 297A.68 subdivision 42 paragraph e

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 09, 2026SenateActionIntroduction and first reading
March 09, 2026SenateActionReferred toTaxes
March 17, 2026SenateActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Adds a new subdivision (subd. 12) defining 'Qualified largescale data center' with a cross-reference to 297A.68 subdivision 42 paragraph e."
      ],
      "removed": [],
      "summary": "This bill amends Minnesota Statutes 2024 section 216B.02 by adding a new subdivision that defines the term 'Qualified largescale data center' by cross-reference to 297A.68.",
      "modified": []
    },
    "citation": "216B.02",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Definition of threshold criteria (size and investment) and time frame."
      ],
      "removed": [],
      "summary": "Defines 'Qualified largescale data center' for tax-related purposes, with thresholds: at least 25,000 square feet and total construction/refurbishment investment in IT equipment and computer software of at least $250,000,000, collectively by the facility and its tenants within a 60-month period beginning after June 1, 2025.",
      "modified": []
    },
    "citation": "216B.02",
    "subdivision": "12"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill cross-references 297A.68 subdivision 42.1.6 as part of the definition for 'Qualified largescale data center' in 216B.02.",
      "modified": []
    },
    "citation": "297A.68",
    "subdivision": "42.1.6"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The definition of 'Qualified largescale data center' uses the meaning given in 297A.68 subdivision 42 paragraph e.",
      "modified": []
    },
    "citation": "297A.68",
    "subdivision": "42 paragraph e"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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