Our client designs, constructs, owns, and operates colocation data centers in North America, Europe, and Asia.
Colocation datacenters are physical facilities in which tenants can lease space for their own hardware and servers. The construction of these datacenters is highly unique, with strict controls for proper power, cooling, design, and security.
Our client was constructing a new datacenter in Arizona. Like many states, Arizona offers owners, operators, and qualified colocation tenants transaction privilege tax (TPT) and use tax exemptions at the state, county, and local levels on qualifying purchases of computer data center (CDC) equipment.
While our client was aware of such exemptions, the general contractor constructing the facility was not. Through the course of phase one of the project, the contractor had failed to apply the exemptions, and paid tax on purchases qualifying for the exemption–then passed the tax cost along to our client.
The client engaged with DMA’s experts to identify purchases made by the contractor that qualified for the exemption. Additionally, our team worked with the contractor to be sure that tax would not be paid on qualifying purchases for phase two of the project.
During the review, DMA identified and recovered over $3.5 million in tax savings for our client.
DMA is the only firm with a dedicated team of datacenter industry tax experts. We work not only with datacenter owner/operators, but also with datacenter tenants, to minimize their sales and use taxes, advise on exemptions unique to the industry, and recover overpayments.
DMA’S TRANSACTION TAX PROFESSIONALS ARE EXPERTS IN EXEMPTIONS
Trust our seasoned transaction tax team to help you maximize all applicable exemptions and minimize your transaction tax obligations.