Michigan Governor Signs Data Center Exemption Bills

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By Nora Macaluso

Dec. 28 — Data centers housing equipment such as computers, servers and routers will be exempt from Michigan sales and use taxes under legislation signed by Gov. Rick Snyder (R).

Senate Bills 616 and 617 (Public Acts 251 and 252), signed Dec. 23, allow the companies to avoid the taxes on the condition the industry as a whole meets benchmarks for job creation (242 DTR H-1, 12/17/15).

Snyder said the legislation—aimed at Las Vegas-based Switch, a data center operator that plans to turn an empty Grand Rapids office building into a data center—puts Michigan's tax laws in line with those of other states. “It's imperative that our tax policies continually develop and evolve to meet the needs of the jobs of tomorrow,” he said in a Dec. 23 statement.

S.B. 616 amends the Sales Tax Act to exempt certain equipment sold to qualified data centers. S.B. 617 does the same for the Use Tax Act. The exemptions, beginning Jan. 1 and running through Dec. 31, 2035, require that at least 400 jobs be established by the industry by 2022, and 1,000 jobs be created by 2026.

To contact the reporter on this story: Nora Macaluso in Lansing, Mich., at nmacaluso@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com