The US state of Colorado could adopt sales- and use-tax exemptions for data center operators with equipment used in their facilities beginning July 1 2015 under House Bill 14-1389 (HB 1389) if it is passed.

HB1389 will allow sales and use tax exemption for the sale, storage and use of IT equipment that will be used in a qualified data center or a qualified refurbished data center.

The bill will also include IT equipment purchased to replace or upgrade IT equipment and IT equipment that is relocated to the state.

The proposed bill requires IT equipment to be used within 20 years of the date of the sale, use, storage or relocation of the IT equipment.

It states data centers are an important asset and create significant economic benefit to the state.

Since 2005, around 17 US states have passed legislation to provide incentives for data centers and those states are “actively recruiting data center investments” according to the Bill’s authors.

The Colorado Office of Economic Development said it will certify whether the data centers fall in to the criteria of a qualified facility.

To become a qualified data center in the state the facility must

• - Compromise of one or more buildings that are built over 25,000 sq ft
• - A facility located on a single campus or adjacent land
• - Investment in the facility that commenced on or after June 30 2010
• - The total cost of construction and investment in IT equipment is at least US$30m within a five-year period
• - Total cost of construction and investment in the facility includes investments of the owner and all other taxpayers that own IT equipment located within the square footage of the facility
• - The facility is to house IT equipment
  
  To become a qualified refurbished data center in the state the facility must

• - Compromise of one or more buildings that are built over 25,000 sq ft
• - The facility is located on a single campus or adjacent land
• - The facility is substantially refurbished after June 30 2013
• - The total cost of refurbishment and investment in IT equipment is at least $15m within a two-year period
• - The facility is to house IT equipment
  
  The Colorado Office of Economic Development said it will submit a report to the members of the general assembly that analyzes and estimates the economic benefits of the exemption on or before July 1 2021 and on or before July 1 every six years thereafter.
  
  According to an article by the Denver Business Journal, business leaders say that HB1389 may be one of the most important incentive bills introduced by the state this year.
  
  Colorado Technology Association representative Sandra Hagen Solin said Colorado is in a good position to “skyrocket” in the tech industry.
  
  “We are doing many things now and the potential is great. This sends a signal to the industry that we’re serious about growing more,” Hagen Solin said.
  
  Data center colocation providers such as Viawest, Equinix and Level 3 all have facilities within the Colorado area.