Committee defers action on data‑center sales‑tax repeal amid fiscal shift concerns

Senate Bill 408, a proposal to hasten repeal of a sales‑tax exemption for certain computer and data‑center equipment, was presented to the Senate Finance Committee but no action was taken as members sought additional fiscal information.

Sponsor Senator Or said SB 408 would revise Code Section 48‑8‑3 to repeal a paragraph sooner than the current 2032 expiration, setting repeal on Jan. 1, 2027. Fiscal‑note materials in committee packets showed varying revenue impacts over time, but committee members cautioned that the repeal could shift purchases into an existing computer‑equipment credit and thereby blunt or reallocate expected savings.

Senator Or reviewed figures and highlighted that savings would be limited until a separate credit expires and that by 2027–2030 the combined figures in the packet run into the hundreds of millions; committee discussion referenced items such as $854 million and $762 million in different table lines when modeling combined effects. The sponsor and the chair said they had requested Department of Revenue assistance to clarify the interactions.

Members also pressed a technical question about whether incentives apply when equipment is merely purchased and warehoused or must be installed and in service. The sponsor indicated that in practice there are expectations about installation and agreements, and that purchases that remain uninstalled would not qualify as in service.

Because members wanted coordinated analysis of multiple credits and exemptions so the Legislature does not simply shift benefits between code sections, the committee deferred action and asked staff and the Department of Revenue for additional information before any vote.

The chair adjourned the committee session without a vote on SB 408.