FRANKFORT, Ky. (WTVQ) – The state House approved a bill Thursday to provide a state sales and use tax exemption for data centers that meet the minimum requirements.
“This measure allows Kentucky an opportunity for investment, economic advancement, and industry diversification,” said the bill’s sponsor, state Rep. Phillip Pratt, of Georgetown. “Large-scale data centers increase local tax revenue, provide for engineering, technician, electrical, and construction jobs, promote broadband expansion, and enhance existing network infrastructure.”
HB 372 provides a state sales tax exemption on data center equipment and construction materials. In order to qualify for the exemption, companies must invest at least $150 million in Kentucky within five years, and create a minimum of 20 permanent, competitive jobs.
“Over the past seven years, no data center has located in a state that imposes a sales tax burden on data center service equipment,” Pratt added. “Without HB 372, Kentucky is at risk of losing out on the next round of data center construction to states that have already enacted tax exemptions.”
“Now more than ever, Americans are depending on the internet to be informed, stay connected, and get their work done.” Pratt said. “Whether educating students, connecting with family, working from home, or participating in a telehealth appointment, its America’s networks and data centers that enable us to continue life digitally.”
HB 372 will go to the Senate, where it is expected to be considered in the upcoming weeks of the 2021 general session.