Florida's HB 7031: A Game Changer for Data Center Sales Tax Exemptions
Big news for data center operators and stakeholders in Florida! The state has passed House Bill 7031 (HB 7031), which significantly alters the sales tax exemption landscape for data centers.
What's the key change?
Effective August 1, 2025, data centers with an IT load of less than 100 megawatts (MW) will no longer qualify for the existing sales tax exemptions on purchases of equipment, electricity, and construction materials.
Previously, Florida offered sales tax exemptions to attract data center investments, with a lower threshold (e.g., 15 MW). HB 7031 aims to redirect these benefits towards much larger-scale data center projects.
Key Impacts for Businesses:
- New Threshold: Only data centers with IT loads of 100 MW or greater will continue to receive the sales tax exemption.
- No Grandfather Clause: This change applies to both existing and future facilities. There is no grandfathering, meaning current data centers under 100 MW will lose their exemption regardless of prior certification.
- Increased Costs: Developers, owners, and tenants of affected data centers may face unexpected increases in capital and operational costs.
- Retroactive Risk: Audits might assess taxes on purchases made after the effective date if the data center no longer qualifies.
This legislative shift is set to reshape Florida's competitiveness in the data center sector and has immediate implications for many facilities.
How SGM Tax Services Can Help
Navigating changes in state tax laws, especially those with significant financial implications like Florida's HB 7031, can be complex. At SGM Tax Services, we specialize in US sales and use tax compliance and are here to help your business understand and adapt to these new regulations.
Whether you're an existing data center operator in Florida or planning future investments, ensuring compliance is crucial. Contact us to discuss how these changes might affect your operations and how we can help streamline your tax obligations.
Reach Out to Us: https://www.sgmtaxserv.com/contact-us.php
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