| (i) Revocation. By filing an application for certification
of a qualifying data center or qualifying large data center project,
the qualifying owner, qualifying operator, and qualifying occupant,
as applicable, commit to meeting the requirements set out in subsection
(d) of this section for qualifying data centers or subsection (e)
of this section for qualifying large data center projects and certify
the data center will be occupied by a single qualifying occupant over
the life of the exemption. For more information, refer to subsection
(d) of this section for qualifying data center requirements, subsection
(e) of this section for qualifying large data center project requirements,
and subsection (g) of this section for the term of the exemption.
(1) Failure to meet one or more of the certification
requirements described in subsection (d) of this section for qualifying
data centers or subsection (e) of this section for qualifying large
data center projects will result in termination of the certification
and the revocation of all related qualifying owner, qualifying operator,
and qualifying occupant exemption registration numbers.
(2) Each entity that has a registration number revoked
will be liable for unpaid sales or use taxes, including penalty and
interest from the date of purchase, on all items purchased tax-free
under this section, back to the original date of certification of
the data center as a qualifying data center or qualifying large data
center project.
(3) If a formal waiver of the statute of limitations
under Tax Code, §111.203 (Agreements to Extend Period of Limitation)
is deemed necessary to insure against a loss of revenue to the state
in the event that a data center's certification is revoked, by allowing
the comptroller to verify, prior to the expiration of the statute
of limitations on assessment, that each of the requirements in subsection
(d) of this section for qualifying data centers or subsection (e)
of this section for qualifying large data center projects has been
met, then the failure to execute a timely statutory waiver will also
result in the termination of the data center's certification and the
revocation of all related registration numbers.
(j) Documentation and record retention.
(1) In accordance with Tax Code, §111.0041 (Records;
Burden to Produce and Substantiate Claims) and §151.025 (Records
Required to be Kept), all qualifying occupants, qualifying owners,
and qualifying operators of a qualifying data center or qualifying
large data center project must keep complete records to document any
and all tax-exempt purchases made under this exemption, and to confirm
payment of the local sales and use tax on such purchases by qualifying
data centers. See §3.281 of this title (relating to Records Required;
Information Required) for additional guidance.
(2) In addition, each qualifying owner, qualifying
operator, and qualifying occupant of a qualifying data center or qualifying
large data center project must keep complete records to document the
applicable capital investment made in the qualifying data center or
qualifying large data center project; the creation of the required
number of applicable qualifying jobs including the retention of those
jobs for a period of at least five years; and documentation of the
contract for the applicable transmission capacity for qualifying large
data center projects. These records must be retained until the data
center's certification expires. For example, a qualifying owner, qualifying
operator, or qualifying occupant should keep comprehensive records
of capital investment expenditures, such as contracts, invoices, and
sales receipts, and employment records regarding job creation, including
associated third-party employer positions.
(3) In the event the comptroller revokes the certification
of a qualifying data center or qualifying large data center project,
the records of all qualifying owners, qualifying operators, and qualifying
occupants must be retained until all assessments have been resolved.
(k) Successor Liability. A purchaser of a qualifying
owner, qualifying operator, or qualifying occupant's business or stock
of goods in a qualifying data center or qualifying large data center
project is subject to Tax Code, §111.020 (Tax Collection on Termination
of Business).
(l) Local tax. The state sales and use tax exemption
for qualifying owners, qualifying operators, or qualifying occupant
of a qualifying data center does not apply to local sales and use
tax. Local sales and use tax must be paid on the purchase of any tangible
personal property that qualifies for exemption from state sales and
use tax under this section. This subsection is not applicable to qualifying
large data center projects.
(m) An entity that qualifies for the exemption under
this section as a qualifying data center or qualifying large data
center project is not eligible to receive a limitation on appraised
value of property for ad valorem tax purposes under Tax Code, Chapter
313 (Texas Economic Development Act).
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| Source Note: The provisions of this §3.335 adopted to be effective February 26, 2014, 39 TexReg 1157; amended to be effective November 10, 2014, 39 TexReg 8742; amended to be effective March 19, 2017, 42 TexReg 1129; amended to be effective February 11, 2018, 43 TexReg 581 |
