Today the MN House Taxes Committee heard two broadband-related bills. I will post them separately for easily search access. They discussed HF1277: Data centers sales and use tax exemption modified, which was held over for possible inclusion in omnibus.
HF1277 (Davids) – Data centers sales and use tax exemption modified
Remarks
I’m not in flavor of tax credits for data centers for 4 reasons:
- Too much energy use – other customers will bear the brunt of the bills
- Unnecessary increase – we already have a data center exemption . It’s being used and we have data centers in MN
- Loss of tax revenue will decrease other tax-funded projects
- Who is going to benefit the most? Massive companies – Google, Amazon…
Not in favor of the bill
- Data center projects will use huge amounts of energy – we have to keep in mind the trade war with Canada and folks who may suffer
- This is a super charge an existing exemption – that will likely be used more prevalently in the future
- The idea of super large data center is concerning
Q: One benefit was supposed to be property tax – but that doesn’t seem likely in MN. Would we?
Data centers would be subject to taxes; personal property may not.
Q: Why isn’t there a sunset on this bill? This is for other data centers but not these and it includes software and other ongoing expenses.
Not supporting the bill
- A billionaire with Trump said he was going to invest billions in data centers
- AI companies have also referenced importance of data centers
- Data centers are expected to grow 40 times in MN. And energy use for data centers is predicted to surpass all energy use for the rest of the state soon
- Minnesota is a competitive place to put data centers without the tax exemption. We have clean water. We have a reliable electric grid. We have good transportation. We have competitive land costs. We have a clean energy goal. We have good workers. Temperature in MN are conducive to data centers
- When this bill first came up we thought the cost would be so much smaller than current predictions. This is the equivalent of an open appropriation.
- Removing the sunset is in violation of our rules.
- This tax cut goes to some of the largest companies and we won’t even be track the tax revenue we are losing because we are moving from refund to exemption.
- In a moment of major budget uncertainty, within and outside of our control, do we want to turn a blank check over to the largest companies in the county?
Dep of Revenue
- We do not have an opinion
- There are some concerns about inability to track impact.
- Usually we work with refunds – not exemptions
Laid over for possible inclusion in omnibus.