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Budget targets roll back data‑center electricity tax exemption and modify R&D credit; net new revenue modest
Summary
Leaders said the budget targets include repeal of the electricity portion of the data‑center tax exemption and changes to the research‑and‑development tax credit; the budget director provided net revenue estimates for the change.
As part of the top‑line targets, leaders said the agreement rolls back the electricity portion of a data‑center tax exemption and modifies the state research‑and‑development (R&D) tax credit.
Chief budget staff provided revenue estimates attributed to those changes. State Budget Director Anna Mingi said repeal of the electricity portion of the data‑center tax exemption generates about $56,000,000 in the first biennium and $83,000,000 in the tails; modifications to the R&D tax credit were estimated to cost about $40,000,000. Leaders said the net effect of those two changes is roughly $16,000,000 in additional net revenue in the first biennium and about $43,000,000 in the out years.
Officials said the majority of the existing data‑center tax preferences would remain in place and that the change affects only the electricity portion of the exemption. Leaders said the R&D changes were included partly at the request of the business community and that the University of Minnesota and research stakeholders view the adjustment as putting the state more in line with peer states on R&D incentives.
Why it matters: the measures are modest revenue generators in the context of a multibillion‑dollar budget but were highlighted as examples of compromises that produce revenue without broad new taxes on families. Officials also noted a small cannabis tax increase and other targeted revenue adjustments in the package.
Attribution: the specific dollar estimates at the press event were provided by Anna Mingi, the state budget director.
