Committee advances bill to limit sales-tax exemption for new data centers to seven years; testimony split

The Senate Local Government and Taxation Committee voted on March 20 to send House Bill 315, as amended, to the fourteenth order for possible amendment. The bill would change the sales-tax exemption for qualifying new large data centers from permanent exemption to a seven-year sunset going forward (the amendment removes retroactive application to facilities already granted exemption, per committee discussion).

Sponsor Representative Bruce (District 23) said the amendment is not retroactive and that the seven-year limit was chosen to set a “clear endpoint” for the incentive. Bruce said the exemption covers more than servers — it also applies to building materials and other costs — and that setting a seven-year limit would allow the state to recapture some revenue to use for tax relief for schools or property taxpayers.

Industry witnesses strongly urged the committee to oppose the bill. Steve Thomas, representing Meta Platforms, said the company has invested about $800 million in a Kuna facility and that the House bill as…