In 2010, the State of Washington passed data center sales and use tax legislation that resulted in a flurry of data center activity within the state. The state was able to land data center commitments from companies such as Microsoft and Yahoo. These tax incentives expired in July of 2011 and, as a result, corporate data center development shifted to Oregon.
Subsequently, the State of Washington passed Senate Bill 6635, wherein they renewed and amended the previous legislation, and expressed their intentions for data center legislation as follows:
It is the legislature’s intent to encourage immediate investments in technology facilities that can provide an economic stimulus, sustain long-term jobs that provide living wages, and help build the digital infrastructure that can enable the state to be competitive for additional technology investment and jobs.
The new bill amended the 2010 legislation to include “and to qualifying (data center) tenants” in its sales and use tax exemption language.
- Within six years of being approved for tax incentives, the qualifying business or tenant must show a minimum increase in net employment to be as follows:
- Thirty-five (35) family wage employment positions; or
- Three family wage employment positions per 20,000 SF of space (or less) that is newly dedicated to housing working server equipment;
- Additional clarification is provided in determining the qualifications for a family wage employment position, and how to count them for purposes of meeting the tax exemption requirements.
- The Data Center must be located in a rural county as defined by RCW 82.14.370
- Commencement of construction must be between March 31, 2010 and July 1, 2011; or between March 31,2012 and July 1, 2015
- Sales and use tax exemption is to include qualifying equipment, and the labor costs associated with the installation, repair, alterations, or improvements of said equipment
For a downloadable copy of the report, please click here.
To read the full Washington State legislation, please click here.