In 2009, the Virginia General Assembly unanimously passed into law data center tax incentive legislation that took effect in July of 2010. The legislation focused on sales and use tax incentives for computer equipment purchased or leased for use in a qualifying data center between July 2010 and June 30 2020. Qualifying data centers required a minimum investment of $150 Million and the creation of at least 50 jobs.
This initial legislation helped the state to secure a massive data center investment from Microsoft in 2010, beating out North Carolina. Over the past couple of years, the data center focus has shifted to North Carolina, causing Virginia to revisit the legislation in place in order to bolster its positioning as an attractive data center destination.
The Virginia General Assembly passed three separate bills that went into effect in July of 2012 that are aimed at strengthening the state’s competitive advantages in the data center site selection process. The three bills are as follows:
HB 216 | SB 112
Expands the state’s current data center sales and use tax exemption for computer equipment or software to also include the data center tenants in addition to the data center owner/operator
This expansion also includes jobs created by the data center owner/operator and tenants
HB 1013 | SB 226
Extends exemptions from Virginia’s capital gains tax for investors in qualified technology start-ups. The law exempts qualified investors from paying 100% of the capital gains tax for three years
This exemption was set to expire June 30, 2013
This exemption has been extended and now will expire June 30, 2015
HB 551 | SB 238
Extends the Telework Expense Tax Credit for employers through December 31, 2016
This bill provides companies with tax credits for costs associated with the building or expanding of a telework program, which is a program to have a company’s employees work from home
For complete details regarding data center tax incentive legislation in the state of Virginia, or for tax incentive information on other states, please contact Mission Critical Consultants. Mission Critical Consultants is a member of the Best Data Sites Alliance™