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Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20170&cosponId=23760
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House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: April 26, 2017 03:16 PM
From: Representative Tedd C. Nesbit
To: All House members
Subject: Data Center Exemptions
 
I intend to reintroduce legislation (prior HB 1120 of the 2015-16 Session) establishing a sales and use tax exemption for equipment purchased by data centers and their tenants. This sales tax exemption promotes large, high-tech computer data center investments in Pennsylvania and reduces neighboring states’ competitive advantage in attracting those investments.

Computer data centers are the backbone and central nervous system of today’s digital age. They process and store data used in remote and cloud computing. The industry is growing rapidly, driven by massive increases in internet data creation, cloud computing and the “Internet of Things,” whereby internet connectivity is increasingly built into common household items such as electronics, appliances, and cars. Now is the time to attract these businesses.

Data centers and related industries, such as computer equipment manufacturers and energy providers, create significant direct capital investments and high-paying jobs. As a result, many states have enacted tax incentive programs to attract data centers and their tenants, making these tax incentives, along with access to reasonably priced energy, the top two considerations for data center owner and tenant site selection. Currently, 20 states including Ohio, Virginia, and West Virginia offer sales tax exemptions to incentivize data center and tenant investments, and many are seeing significant benefits.

In June 2016, as part of the budget negotiations, the provisions in HB 1120 were converted to a sales tax refund program with a limited pool of $5 million to be allocated pro-rata among all data center owners and their qualified tenants. While enactment of this refund program is a positive first step, a rebate program does not provide the certainty that data centers and their tenants need when making capital investment or site location decisions. Therefore, I am reintroducing my bill from last session and intend for it to replace the capped rebate program enacted last year.

This legislation will help create jobs and new sustainable revenue. Please join me in cosponsoring this legislation.

Previous Cosponsors: GABLER, SCHREIBER, IRVIN, THOMAS, D. PARKER, GIBBONS, PYLE, KOTIK, TOPPER, BARRAR, MUSTIO, MURT, WATSON, A. HARRIS, JOZWIAK, TURZAI, ELLIS and BENNINGHOFF



Introduced as HB1558