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H 315

TAXATION – Amends existing law to revise provisions regarding the sales tax exemption for Idaho information technology equipment.

68th Legislature, 1st Regular Session (2025)

New qualifying data center exemptions expire after seven years for projects approved after March 1, 2025; before that, exemptions remain in place.

Reported out of committee; to 14th Order for amendment
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Bill Summary · H 315

Summary — H 315 (2025): Sales Tax Exemption for Idaho Information Technology Equipment

Purpose

H 315 amends Idaho Code § 63-3622VV to limit the duration of the sales tax exemption for eligible data center equipment and facilities. The bill moves from an effectively perpetual exemption (for qualifying projects) to a time‑limited exemption for projects approved on or after March 1, 2025, and directs any taxes remitted after expiration to the state’s tax relief fund. The act includes an emergency clause making it effective upon passage and approval.

Key provisions

  • Amends section 63-3622VV (Idaho information technology equipment sales tax exemption).
  • Grandfathering: taxpayers who received the exemption before March 1, 2025, are exempt from the new time limit (their exemptions do not expire after seven years).
  • New expiration rule: for any qualifying business entity that receives the exemption on or after March 1, 2025, the exemption expires seven (7) years from the date the entity’s provisional exemption becomes final.
  • Provisional exemption mechanics remain:
    • A provisional exemption is available while a qualifying entity makes capital investments.
    • The provisional exemption becomes final if the entity meets investment and job-creation thresholds within the specified timeframes; otherwise the entity must pay the sales or use taxes that would have been due.
  • Thresholds to qualify (unchanged):
    • Aggregate capital investment of at least $250,000,000 in data center(s) within the first 5 years after commencement of construction.
    • Creation and maintenance of at least 30 new full‑time, nonseasonal jobs within 2 calendar years after commencement of operations; those jobs must pay, on average, at least the county average weekly wage.
  • After the 7‑year expiration for post‑March 1, 2025 projects, qualifying entities must remit sales tax on items that would otherwise be exempt; remitted funds are transferred quarterly to the tax relief fund (section 57-811, Idaho Code).
  • The State Tax Commission is authorized to adopt rules and enforce the provision (existing administrative powers cited).

Definitions (selected)

  • “Eligible server equipment”: servers, rack servers, chillers, storage devices, generators, cabling, and enabling software integral to such equipment.
  • “New data center facilities”: buildings or structural components used or intended primarily as a data center.
  • “Commencement of operations”: date a certificate of occupancy is issued.

Fiscal impact

  • Fiscal note (proponent-prepared): the bill is not expected to cost the state; potential increased revenues are uncertain but could be significant and would be directed to the tax relief fund. (Note: the fiscal note is a proponent attachment and not a formal legislative intent statement.)

Who is affected

  • Primary: data center owners/operators and contractors building/ equipping data centers in Idaho (especially projects starting on or after March 1, 2025).
  • Secondary: Idaho taxpayers (through potential increased state receipts directed to the tax relief fund) and local labor markets (job creation conditions).

Procedural status & timeline

  • Introduced: February 24, 2025.
  • House passage: Passed the House (60‑8‑2) on March 7, 2025.
  • Reported out of committee; to 14th Order for amendment (status: reported out of committee — to 14th Order for amendment as of March 26, 2025).
  • Emergency clause: the act is effective immediately upon enactment.

This bill shifts the exemption from an open‑ended benefit to a seven‑year limited exemption for new qualifying data center projects after March 1, 2025, while preserving benefits for entities that already secured the exemption prior to that date.

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

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