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Tax Incentives and Advantages

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Valuable Tax Incentives

Companies that build data or network operation centers of at least 25,000 square feet and invest at least $30 million within 48 months $30 million in the first four years or substantially refurbish a data or network operations center of at least 25,000 square feet and invest at least $50 million with 24 months may qualify for valuable tax breaks.

Qualifying projects receive sales tax exemptions for up to 20 years on:

  • Computers and servers
  • Cooling and energy equipment
  • Energy use
  • Software

And pay no personal property tax. Ever.

Favorable Tax Advantages

Favorable tax provisions give Minnesota data centers important competitive advantages. The state's business taxes rank 20th-lowest in the nation. Minnesota's carry-forward and lack of a throwback encourage business startups. The refundable research and development credit (10 percent for the first $2 million, 2.5 percent thereafter) spurs innovation and helps offset some tax liabilities.

In addition, Minnesota DOES NOT tax:

  • Personal property
  • Inventories
  • Utilities
  • Internet access
  • Information services
  • Custom-created software

These exemptions, coupled with generous incentives and low tax liability on new investment, create an extremely favorable climate for data centers.

Apply for the Sales Tax Exemptions

To become a designated qualified data center and receive these sales tax exemptions, companies must first be certified to participate in the program.

Complete this Data Center Certification Application and submit according to the instructions.

Learn more about how the Minnesota Department of Revenue processes sales tax refunds for qualified data center exemptions.

Special incentives, lower business taxes, lower energy costs, top-shelf infrastructure and a highly skilled workforce make it more attractive than ever to build data and network operation centers in Minnesota. Read our Fact Sheet on Data Centers.

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