House fiscal analysts lay out budget impact of Chapter 13: data centers and cannabis drive revenue gains; R&D credit costs offset some gains
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Summary
House Fiscal analysts told the House Taxes Committee that repealing the data-center electricity exemption and raising the cannabis gross‑receipts tax were the largest revenue increases; a modified refundable R&D credit is among the largest revenue reductions, leaving a net state tax revenue increase in the tens of millions in 2026–27.
House Fiscal Analysis staff Cynthia Templin and Katrina Highmark presented the committee with the estimated fiscal impacts of Chapter 13.
Templin told members the modified, capped refundable research-and-development credit carries an estimated cost of about $40.8 million in fiscal 2026–27 and roughly $39.6 million in fiscal 2028–29. She identified the repeal of the upfront electricity exemption for qualified data centers as a significant revenue increase, estimating about $56.25 million in fiscal 2026–27 and $82.7 million in fiscal 2028–29 tied specifically to that repeal. Templin also said the June accelerated payment shift is estimated to raise about $22.82 million when it takes effect in June 2027.
On cannabis tax changes, Templin said the increase in the gross‑receipts tax from 10% to 15% and the repeal of a 20% dedication of that tax to a local aid fund raised an estimated $52.8 million in fiscal 2026–27 and $94.9 million in later years, with the dedication repeal adding an estimated $23.7 million in fiscal 2026–27 and $40.9 million in 2028–29 to the general fund.
Katrina Highmark summarized the appropriation and property‑tax side, including modest costs for some tribal property exemptions, a Bloomington Port Authority exemption, land‑bank abatements, and a 10% reduction in sustainable forest incentive payments beginning in fiscal 2028–29 (an estimated savings of about $3.77 million).
Representative Robbins asked whether the committee's Chapter 13 summary reflected the broader set of tax and fee changes from the 2025 special session; Templin clarified the committee summary posted and discussed at this meeting covers only Chapter 13 and not other special‑session fee and surcharge changes that also increase revenue.
The fiscal spreadsheet and detailed line‑item estimates were provided to members in the committee packet for review.
