Taxpayer group: Some state tax policies disadvantage data centers
The National Taxpayers Union argues that state tangible personal property taxes can unfairly burden data centers by overvaluing rapidly depreciating servers and other equipment. The group also defends sales-tax exemptions for data center equipment as consistent with exemptions available to other industries, even as some states consider reducing such benefits.
The National Taxpayers Union released studies criticizing state tax policies affecting data centers. It argues that tangible personal property taxes can disproportionately burden data centers because depreciation schedules designed for manufacturing equipment may overvalue servers that become obsolete within a few years. NTU President Pete Sepp called for uniform, neutral and stable personal property tax laws.
The group also examined sales-and-use-tax exemptions for data center equipment. While 33 states offer conditional exemptions and two provide them automatically, S&P Global Market Intelligence found that eight states recently took steps to suspend or eliminate exemptions or related benefit programs. NTU Senior Fellow Jared Walczak said the exemptions generally reflect standard tax principles that avoid taxing business inputs multiple times, rather than providing special treatment to data centers.