Kansas committee hears months-long push for sales-tax exemption to attract large data centers

Summary

The House Committee on Taxation heard hours of testimony on Senate Bill 51, which would grant tiered sales-tax exemptions for qualified data centers that meet investment and job thresholds. Proponents argued the exemption is needed to compete regionally; opponents raised concerns about power, water and long-term costs to ratepayers.

The House Committee on Taxation convened a hearing on Senate Bill 51, a proposal to create a tiered sales-tax exemption for large data centers that make minimum capital investments and meet job-creation thresholds.

Senate Bill 51 would allow a qualified firm that invests at least $250,000,000 in a qualified data center and creates at least 20 new jobs to apply for a sales-tax exemption covering construction, data-center equipment, eligible costs and certain labor. Firms investing $250 million would be eligible for a 15-year exemption, $500 million for 30 years and $1 billion for 60 years, under terms negotiated with the Secretary of Commerce.

The bill requires applicants to enter an agreement with the Secretary of Commerce before receiving an exemption, submit to audits by the Department of Revenue and comply with information publication requirements for economic development incentives. The secretary may review designated firms every five years and may revoke, suspend or require repayment of exemptions if an entity fails to cure any breach within 120 days after notice.

NetChoice representative Brad Smoot, testifying for proponents, said the exemption is intended to make Kansas…

Kansas committee hears months-long push for sales-tax exemption to attract large data centers

Summary

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