Tax

Missouri Data Center Sales & Use Tax Exemptions

June 2015
Author:  Bob Johnson Jr

Bob Johnson Jr

Partner

SALT Services

Manufacturing & Distribution

1201 Walnut Street, Suite 1700
Kansas City, MO 64106-2246

Kansas City
816.221.6300

In April 2015, Missouri Gov. Jay Nixon signed a bill, taking effect August 28, 2015, that provides state and local sales and use tax exemptions for machinery, equipment, computers, electrical energy, gas, water and other utilities, including telecommunication and Internet services, used in new data storage center facilities. The bill also provides a state and local sales and use tax exemption for purchases of tangible personal property for the construction of a new data storage center facility.

The bill also allows existing data storage center facilities to qualify for a state and local sales and use tax exemption for purchases of machinery, equipment, computers, electrical energy, gas, water and other utilities, including telecommunication and Internet services. Existing data storage center facilities may only apply the exemption to the increase in expenditures for utilities over the previous year’s expenditures.

New data storage center facilities must submit an application to the Department of Economic Development (DED) for certification to qualify for the exemption. The application must show the project will result in at least $25 million of new facility investment and create at least 10 new jobs with wages of at least 150 percent of the county average over a three-year period. Existing data storage center facilities also must submit an application to the DED documenting a minimum of $5 million in new facility investment over a one-year period and creation of at least five new jobs with wages of at least 150 percent of the county average over a two-year period.

New data storage center facilities may receive incentives for a maximum project period of 15 years. Existing data storage center facilities may receive incentives for a maximum project period of 10 years.

In addition, the bill allows DED and the Department of Revenue to conduct random audits to verify approved applicants are compliant with the requirements for the new tax exemptions.

New and existing data storage center facilities expanding in Missouri may qualify for a state and local tax exemption that could result in sales and use tax savings of $225,000 to $1,050,000 if certain qualifications are met.

To learn more about this exemption and the requirements, contact your BKD advisor.

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