HB15-1158

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HB15-1158 - Sales & Use Tax Refund For Data Centers

Inactive
Concerning A Refund Of The State Sales And Use Tax Paid For Information Technology Equipment That Is Used In Certain Data Centers.

Beginning January 1, 2016, the bill allows a sales and use tax refund to the owner, operator, or tenant of a facility that is a qualified data center or a qualified refurbished data center for the state sales or use tax paid on information technology equipment (IT equipment) that is used and maintained in the qualified data center or qualified refurbished data center for at least one year. The refund also applies to IT equipment that is purchased to replace or upgrade IT equipment and IT equipment that is relocated to the state.

The bill specifies the criteria for a facility to be a qualified data center or a qualified refurbished data center, including the following:

  • The facility and the related premises is primarily used to house and operate IT equipment and has certain fire suppression, climate control, and security systems;
  • The facility is located in the state;
  • The facility is comprised of one or more buildings that consist in the aggregate of at least 25,000 square feet;
  • The facility is located on a single parcel or on contiguous or adjacent parcels of land;
  • For a qualified data center, the total cost of constructing the facility and the investment in IT equipment for the facility is at least $40 million within a 5-year period that begins not earlier than January 1, 2011; and
  • For a qualified refurbished data center, all or a portion of the facility has been substantially refurbished, and the total cost of refurbishing the facility and the investment in IT equipment for the refurbished facility is at least $20 million within a 2-year period that begins not earlier than January 1, 2014.

The owner, operator, or tenant of a facility that wants to claim the refund is required to submit an affidavit to the Colorado office of economic development (office), along with supporting documentation required by the office, stating that the facility satisfies the criteria to be a qualified data center or a qualified refurbished data center or that the tenant satisfies the criteria to be a qualified tenant.

The office is required to determine whether a facility is a qualified data center or a qualified refurbished data center and whether a tenant is a qualified tenant and to notify the department of revenue. Upon such determination, the office is required to issue a certification to the owner, operator, or tenant of the facility stating that the owner, operator, or tenant may claim a refund for the state sales and use tax paid on IT equipment that is used and maintained in the facility.

If the office determines that a facility is a qualified data center or a qualified refurbished data center, the facility retains its qualified status for 20 years from the date of the first investment in the facility for the purpose of becoming a qualified data center or a qualified refurbished data center. In addition, if a qualified data center or a qualified refurbished data center makes a later investment that satisfies the criteria to be a qualified refurbished data center, the facility's 20-year qualified status restarts as of the date of the new qualifying investment.

To claim the refund allowed by the bill, the owner or operator of a qualified data center or a qualified refurbished data center or a qualified tenant must submit to the department of revenue a refund application, a copy of its certification from the office, and proof of payment of state sales and use tax in a form and manner to be determined by the department.

In the first year that a facility is certified as a qualified data center or a qualified refurbished data center, the owner, operator, or tenant of the facility must include in its application all of the IT equipment purchases that it made and all IT equipment that it relocated to the state during the 5-year or 2-year period, as applicable, during which the facility was making investments to become a qualified data center or a qualified refurbished data center and for which the refund is claimed. A refund is not allowed for any state sales or use tax paid for IT equipment prior to January 1, 2016.

The office is required to submit an annual report to the general assembly regarding the economic benefits of the state sales and use tax exemption on IT equipment used and maintained in qualified data centers or qualified refurbished data centers. To assist the office in preparing the report, each owner, operator, and tenant of a qualified data center or qualified refurbished data center is required to submit an annual report to the office with information requested by the office.

The department of revenue is required to promulgate rules for the implementation of the sales and use tax refund.

Latest update: May 6, 2015
05/06/2015 Senate Third Reading Lost - No Amendments
05/06/2015 Senate Third Reading Reconsidered - No Amendments
05/06/2015 Senate Third Reading Lost - No Amendments
05/05/2015 Senate Second Reading Special Order - Passed - No Amendments
05/01/2015 Senate Committee on Appropriations Refer Unamended to Senate Committee of the Whole
04/30/2015 Senate Committee on Finance Refer Unamended to Appropriations
04/27/2015 Introduced In Senate - Assigned to Finance + Appropriations
04/27/2015 House Third Reading Passed - No Amendments
04/23/2015 House Second Reading Passed with Amendments - Committee
04/22/2015 House Committee on Appropriations Refer Amended to House Committee of the Whole
03/19/2015 House Committee on Finance Refer Amended to Appropriations
02/26/2015 House Committee on Business Affairs and Labor Refer Amended to Finance
01/29/2015 Introduced In House - Assigned to Business Affairs and Labor + Finance + Appropriations