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01/28/2021 01:27 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20190&cosponId=30840
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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: January 6, 2020 09:49 AM
From: Representative Donna Oberlander
To: All House members
Subject: Data Center Sales and Use Tax Exemption
 
In the near future I will re-introduce legislation similar to House Bill 1088 to establish a sales and use tax exemption for certain equipment purchased by computer data centers and their tenants. Like sales tax exemptions for other industries in the Commonwealth, such as farming, manufacturing and mining, this legislation will incentivize companies to locate their data centers in Pennsylvania, creating capital investments and high-paying jobs as a result.

Act 84 of 2016 enacted a tax refund program on the sale of data center equipment with an annual cap of $5 million—and was raised to $7 million under Act 13 of 2019. However, the $7 million is allocated pro rata among all eligible refund applicants. This means that companies considering locating their data centers in Pennsylvania do not know the amount of savings they would be able to invest in additional capital or jobs until more than a year after they make their investments. This has the potential to drive away critical economic opportunities in our Commonwealth.

Therefore, I am introducing legislation to replace the existing tax refund program with a sales tax exemption on data center equipment. Replacing the tax refund program will allow Pennsylvania to compete with Ohio and Virginia and nearly 20 other states that have implemented a standard sales tax exemption program, allowing for new investments from companies not formerly located in Pennsylvania. My bill will help create jobs and new sustainable revenue. It promotes economic growth and fosters Pennsylvania's workforce development through the creation of high-paying, high-tech jobs in data centers and related industries.

I urge you to support this sales tax exemption for data center equipment, an industry that represents the future for Pennsylvania. Please join me in co-sponsoring this legislation.



Introduced as HB2332