Department of Revenue Director Brett Fanning and the agency’s property-tax administrator, Ken Gill, answered lawmakers’ questions about how data centers are taxed and what tax revenue Wyoming currently receives.

Fanning told the committee there are no statutorily authorized exemptions for data-center property taxes. "We need to be clear on this. For the property tax element of the data centers, there are no exemptions," he said, adding that local governments receive the property-tax proceeds.

Ken Gill explained how data-center value is typically assessed. He said most of the companies’ value lies in business personal property (servers, networking equipment) that is reported by the company, trended to current dollars, then depreciated. "Most of the assets in these data centers have a lifespan of six years at the most," Gill said, noting in practice equipment is often replaced every three to four years. Gill said land is valued using a market-sales-comparison approach and that improvements are often assessed by a replacement-cost approach less depreciation.

On sales and use taxes, Fanning told the committee the department’s prior survey showed about $22,000,000 in tax foregone related to data-center purchases (as of roughly two years ago), and that a longer historical average (2010–2022) showed about $15,000,000 per year in tax foregone on reported data-center purchases. He said a more recent look at 2017–2022 showed an increase to about $19,000,000 in tax foregone. Fanning emphasized the figures are challenging to pin down because data centers buy a mix of taxable consumables from in-state vendors (which generate sales tax) and purchases from out-of-state vendors where use tax accrual may apply.

Fanning said department analysts saw material sales-tax exposure during data-center construction because out-of-state contractors must report tax on materials used in real-property work when required by statute. He said the department found examples where multi-hundred-million-dollar contracts had millions in taxable materials, and that aggregate material purchases can produce "material sales tax figures." He offered to have his team and local partners analyze the data centers’ property-tax totals (using correct abstract codes) and to run an analysis of sales tax on materials for major projects.

What was requested: Committee members asked the department to return with an updated accounting using correct abstract codes and an explanation of which purchases are currently subject to sales tax or use tax and how remittance and accruals are handled for out-of-state contractors. The department agreed to follow up with a more detailed data analysis.

Limitations: The department said earlier figures derive from surveys and incomplete responses; Fanning said the $22 million number is a lower-bound estimate from prior surveys and that further work is needed to tie account-level data to those survey totals.