House taxes committee hears wide testimony on HF1277 to expand data‑center sales tax exemption

At a House Taxes Committee hearing, members heard several hours of testimony on House File 1277 (HF1277), a proposal to expand Minnesota's existing sales-and-use tax relief for data centers by creating a new category of "large scale data centers" and allowing certain exemptions to be taken at the point of sale rather than through the current refund process.

Supporters said the change would reduce administrative burdens for applicants and make Minnesota more competitive for multi‑hundred‑million‑dollar investments. "This is nearly a $100,000,000,000 market, bigger than manufacturing, telecom, or any other industry," Barbara Comstock of NetChoice told the committee, citing national figures and outcomes from Virginia. Business and labor witnesses, including Andy Campbell of the Minnesota Pipe Trades Association and Joel Johnson of the IBEW State Council, said large-scale data centers bring construction jobs and ongoing maintenance work to local economies.

Opponents raised concerns about transparency, fiscal cost and environmental impacts. Aaron Lehi of the Minnesota Center for Environmental Advocacy said the bill "makes the problem of accountability for supersized mega data centers worse by converting the…