SF4203

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