HP1202, LD 1722, item 1, An Act To Encourage Computer Data Center Development by Providing a Sales Tax Refund or Exemption

An Act To Encourage Computer Data Center Development by Providing a Sales Tax Refund or Exemption

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 36 MRSA §2021 is enacted to read:

§ 2021. Refund of sales tax for computer data center purchases

1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A. "Computer data center" or "center" means a facility comprising one or more buildings, occupied by one or more businesses, with a combined square footage of at least 20,000 square feet constructed or refurbished to be used primarily to house working servers and having:

(1) An uninterruptible power supply or generator backup power;

(2) Sophisticated fire prevention and suppression systems; and

(3) Enhanced building security measures, such as restricted access to the facility, permanent security guards, video camera surveillance, electronic passcode systems, keycards, biometric scans or similar security features.

For a computer data center comprising multiple buildings, each separate building is considered a computer data center if the building has all of the characteristics listed in subparagraphs (1) to (3).

B. "Electronic data storage and data management services" includes, but is not limited to:

(1) Providing data storage and backup services;

(2) Providing computer power and hosting enterprise software applications;

(3) Hosting websites; and

(4) Providing online services such as e-mail, website browsing and searching, media applications and other services, regardless of whether a charge is made for those services.

C. "Eligible computer data center" means a computer data center located in the State for which a building permit is issued before October 1, 2021 and that has a space of at least 20,000 square feet dedicated to housing working servers that was not dedicated to housing working servers before October 1, 2018.

D. "Eligible power infrastructure" means all fixtures and equipment necessary for the transformation, distribution or management of the electricity required to operate eligible server equipment within an eligible computer data center, including electrical substations, generators, wiring and cogeneration equipment.

E. "Eligible server equipment" means server equipment installed in an eligible computer data center on or after October 1, 2018 and server equipment that replaces existing server equipment, if the sale or use of the server equipment being replaced qualifies for a sales tax refund or exemption under this section and is installed and put into regular use before October 1, 2021.

F. "Qualifying business" means a business entity that exists for the primary purpose of engaging in commercial activity for profit and that is the owner or lessee of an eligible computer data center that certifies that it will add at least 20 qualifying jobs at that center within 6 years after the date the qualifying business first becomes eligible for a sales tax refund or exemption under this section.

G. "Qualifying job" means a full-time job with an average weekly wage that exceeds the average weekly wage for the county in which the job is located.

H. "Server" means a blade or rack-mounted server computer used in a computer data center exclusively to provide electronic data storage and data management services for internal use by the owner or lessee of the computer data center, for the clients of the owner or lessee of the computer data center or for both. "Server" does not include a personal computer.

I. "Server equipment" means the server chassis and all computer hardware contained within the server chassis. "Server equipment" also includes computer software, other than custom computer software, necessary to operate the server. "Server equipment" does not include the rack upon which the server chassis is installed and computer peripheral equipment such as keyboards, monitors, printers and other devices.

2. Sales tax refund authorized. A qualifying business is eligible for a refund of sales tax paid by that business on the purchase of the following services or items upon presenting to the State Tax Assessor evidence that the transaction is eligible for refund under this section:

A. Eligible server equipment;

B. Eligible power infrastructure; and

C. Electronic data storage and data management services.

An application for a refund must be filed with the assessor within 36 months after the date of purchase.

3. Sales tax exemption; certificate. A purchaser is not required to pay sales tax on the purchase of services or items eligible for a refund under this section if the purchaser has obtained a certificate from the State Tax Assessor stating that the purchaser is eligible to purchase services or items eligible for a refund without paying sales tax. The seller is required to obtain a copy of the certificate together with an affidavit as prescribed by the assessor, to be maintained in the seller's records, attesting to the qualification of the purchase for a sales tax exemption pursuant to this section. In order to qualify for this sales tax exemption, the items or services must be used directly and primarily in an eligible computer data center.

4. Recapture. A qualifying business that fails to add at least 20 new full-time employees within 6 years after the qualifying business first becomes eligible for a sales tax refund or exemption under this section must be assessed the amount of sales tax refunded or forgone by the State plus interest at the rate specified in section 186.

5. Audit. The State Tax Assessor has the authority to audit any claim filed under this section. If the assessor determines that the amount claimed for a sales tax refund or exemption is incorrect, the assessor shall redetermine the claim and notify the claimant in writing of the redetermination. If the claimant has received reimbursement of an amount that the assessor concludes should not have been reimbursed, the assessor may issue an assessment for that amount within 3 years from the date the reimbursement claim was filed or at any time if a fraudulent reimbursement claim was filed. The claimant may seek reconsideration, pursuant to section 151, of the redetermination or assessment.

SUMMARY

This bill provides a sales tax refund or exemption for the purchase of eligible server equipment, eligible power infrastructure and electronic data storage and data management services by an eligible computer data center that begins operation between October 1, 2018 and October 1, 2021. A qualifying business must add at least 20 full-time jobs with above-average wages within 6 years after the business first becomes eligible or the amount of refunded or exempt taxes plus interest will be recaptured by the State.

HP1202 LD 1722	Session - 128th Maine Legislature		LR 2711 Item 1
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