MN
Minnesota House Bill HF1277

Minnesota 2025-2026 Regular Session

Minnesota House Bill HF1277

Introduced
2/20/25  

Caption

Data centers sales and use tax exemption modified.

Impact

The modifications outlined in HF1277 are expected to not only promote the growth of data centers within Minnesota but also create jobs both in the construction and ongoing operation phases. By exempting certain tax liabilities, the state encourages companies to either establish new data facilities or refurbish existing sites significantly, striving for an investment of at least $30 million. This could lead to increased competition among states to attract tech investments and enhance local employment opportunities in the burgeoning tech sector.

Summary

House File 1277 proposes modifications to the sales and use tax exemptions specific to qualified data centers in Minnesota. The bill aims to encourage the establishment and expansion of data centers within the state by offering tax exemptions on certain purchases related to these facilities. Specifically, it focuses on enterprise information technology equipment, construction materials, and electricity utilized in the operation of qualified data centers, which must meet specific size and investment criteria to qualify for these exemptions. The revisions include defining what constitutes a 'qualified data center' based on its size, investment threshold, and construction date, aiming to bolster Minnesota's standing in the tech industry.

Contention

While supporters of HF1277, including lawmakers and business advocacy groups, argue that the bill will stimulate economic growth and position Minnesota as a favorable location for tech industries, critics express concerns about the potential loss of tax revenue. They argue that such exclusions could undermine funding for essential community services. Further, there may be apprehensions about ensuring sufficient oversight and regulations surrounding these data centers, especially regarding employment practices and environmental standards associated with such facilities.

Latest HF1277 Activity

Companion Bills

MN SF769

Similar To Certain data centers tax exemption modification

Previously Filed As

MN SF4983

Data centers sales and use tax exemption modification

MN HF4929

Data center sales and use tax exemption modified.

MN HF3193

Sales and use tax provisions modified, taxation of transfers of prewritten computer software clarified, and exemption for qualified data centers modified.

MN HF1603

Sales and use tax provisions modified, exemption provisions modified for construction materials by certain contractors, and refund provision added.

MN HF2576

Sales and use tax provisions modified, exemption provisions for construction materials purchased by contractors modified, and refund provision added.

MN HF2577

Sales and use tax provisions modified, and exemption provided for construction materials used for road construction or repair if purchased by contractors.

MN SF4498

Certain contractors construction materials sales and use tax exemption provisions modifications and refund provision added

MN HF706

Sales and use tax provisions modified, sales tax exemption for meals and drinks expanded, and sales tax exemption for capital equipment purchases expanded.

MN HF5015

Refundable sales and use tax exemption provided for construction materials used for residential housing.

MN SF4764

Construction material used for residential housing sales and use tax refundable exemption establishment

Similar Bills

MN SF769

Certain data centers tax exemption modification

MN SF4983

Data centers sales and use tax exemption modification

MN HF4929

Data center sales and use tax exemption modified.

MN SF3265

Sales and use tax exemption for data centers repeal

MN HF3304

Sustainable aviation fuel income tax credit and exemptions for data centers and construction of sustainable aviation fuel facilities repealed, increased general fund amounts reallocated from repealed tax provisions to increase the renter's credit, and corresponding technical changes made.

MN HF3193

Sales and use tax provisions modified, taxation of transfers of prewritten computer software clarified, and exemption for qualified data centers modified.

MN HF16

Data center regulatory bill.

MN SF19

Requirements governing data centers modifications