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HB 2655

Providing a retail sales and use tax exemption for the construction and equipping of new data centers located in a county east of the Cascades that borders another state and has a population of at least 500,000.

2025-2026 Regular Session Introduced by April Berg and 5 co-sponsors

Washington bill exempts new data center construction and equipment from sales tax in eastern border counties with 500,000+ population, targeting Spokane County investment.

Public hearing in the House Committee on Finance at 8:00 AM.
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WeVote Research Nonpartisan
Bill Summary · HB 2655

Legislative bill overview

HB 2655 would exempt new data center construction and equipment purchases from Washington's retail sales and use tax, but only for facilities in eastern Washington counties that border another state and have populations exceeding 500,000. This creates a geographically targeted tax incentive designed to attract data center investment to specific regions.

Why is this important

Data centers represent significant capital investment and ongoing economic activity, making them valuable recruitment targets for states. However, tax exemptions reduce state revenue and raise questions about whether incentives actually drive location decisions or simply subsidize projects that would occur anyway. This bill directly affects Washington's tax base and competitive positioning for a growing industry.

Potential points of contention

  • Revenue impact: Sales tax exemptions on construction materials and equipment can be substantial; fiscal note will clarify costs to the state budget
  • Geographic specificity: The narrow targeting (only Spokane County qualifies currently) raises fairness concerns and questions about whether these restrictions serve legitimate policy purposes or favor specific interests
  • Economic effectiveness: Debate over whether tax incentives are necessary to attract data centers versus whether market factors and infrastructure already make locations attractive, making exemptions unnecessary subsidies

Compiled from official sources — confirm details with the bill’s official record.

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