Wisconsin’s Data Center Sales and Use Tax Exemption, created by 2024 Wis. Act 19, aims to bolster economic growth and attract high-technology investments by offering substantial tax incentives to businesses investing in data center projects.
Key Takeaways
- The Wisconsin Data Center Sales and Use Tax Exemption provides significant long-term tax savings by exempting eligible tangible personal property used in the development, operation, and maintenance of qualified data centers, including essential hardware, cooling systems, and construction materials, from sales and use tax.
- Eligibility for Wisconsin’s Data Center Sales and Use Tax Exemption requires businesses engaged in data center operations to meet specific investment thresholds based on county population, create or retain significant jobs, and locate the data center in Wisconsin.
Benefits
The primary benefit of Wisconsin’s Data Center Sales and Use Tax Exemption is the exemption from sales and use tax on the sale, lease, purchase, or use of eligible tangible personal property. This includes:
- Tangible personal property used exclusively for the development, construction, renovation, expansion, replacement, repair, or operation of a qualified data center
Examples include computer server equipment, networking equipment, and other essential hardware. - Tangible personal property used in the development, construction, renovation, expansion, replacement, or repair of a water cooling or conservation system used exclusively for one or more qualified data centers
This includes equipment such as chillers and cooling systems. - Tangible personal property sold to a construction contractor that, in fulfillment of a real property construction activity, becomes a component of the qualified data center
The exemption is valid for the duration of the data center’s operation, providing long-term tax savings. These exemptions significantly reduce the initial capital expenditure and ongoing operational costs, making Wisconsin an attractive location for data center investments.
Eligibility
Eligibility for Wisconsin’s Data Center Sales and Use Tax Exemption includes criteria such as:
- Business Type: Must be a business engaged in data center operations
- Investment Amount:
- For counties with a population of less than 50,000: A minimum investment of $75 million in a qualified data center facility
- For counties with a population between 50,000 and 99,999: A minimum investment of $150 million in a qualified data center facility
- For counties with a population of 100,000 or more: A minimum investment of $200 million in a qualified data center facility
- For buildings in multiple counties: The investment amount is based on the most populous county
- Job Creation/Retention: Commitment to creating and retaining significant employment within the data center
- Location Requirements: Data centers must be located in Wisconsin and meet the specified investment thresholds based on county population
| This website content should be used for general informational purposes only, and not as a substitute for consultation with professional tax, legal, or other competent advisors. Before making any decision or taking any action based upon information contained on this website, you should consult with a DMA professional. |
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