| (A) A qualifying data center's sales tax exemption
expires 10 years from the date of certification by the comptroller
if the qualifying owner, qualifying operator, or qualifying occupant,
independently or jointly, makes a capital investment of at least $200
million, but less than $250 million, within the first five years after
certification.
(B) A qualifying data center's sales tax exemption
expires 15 years from the date of certification by the comptroller
if the qualifying owner, qualifying operator, or qualifying occupant,
independently or jointly, makes a capital investment of at least $250
million within the first five years after certification.
(3) A qualifying large data center project's exemption
period ends 20 years from the date of certification by the comptroller
provided the qualifying owner, qualifying operator, or qualifying
occupant, independently or jointly, makes a capital investment of
at least $500 million within the first five years after certification.
(4) The comptroller will audit each qualifying data
center and qualifying large data center project at its five year anniversary
to verify the amount of capital investment made and to verify that
the jobs creation requirement has been met. The comptroller will also
verify the contract for transmission capacity for operation of a qualifying
large data center project.
(5) Once all jobs are created, as required under subsection
(d) of this section for qualifying data centers or subsection (e)
of this section for qualifying large data center projects, the qualifying
owner, qualifying operator, or qualifying occupant, either singly
or jointly, must timely notify the comptroller by providing a properly
completed Qualifying Data Center or Qualifying Large Data Center Project
Job Creation Report, 01-160.
(h) Exemption certificate. Each person who is eligible
to claim an exemption authorized by this section must hold a registration
number issued by the comptroller.
(1) To claim an exemption under this section for the
purchase of tangible personal property, a qualifying owner, qualifying
operator, or qualifying occupant must provide to the seller of a taxable
item an Exemption Certificate for Qualifying Data Centers or Qualifying
Large Data Center Projects, Form 01-929. The exemption certificate
does not apply to local sales and use tax for qualifying data centers.
Refer to subsection (l) of this section for more information regarding
local sales and use tax.
(2) To claim the exemption, a qualifying owner, qualifying
operator, or qualifying occupant must properly complete all required
information on the exemption certificate, including:
(A) the data center registration number;
(B) the registration number of the qualifying owner,
qualifying operator, or qualifying occupant, as applicable;
(C) the address of the qualifying owner, qualifying
operator, or qualifying occupant, as applicable;
(D) a description of the tangible personal property
to be purchased;
(E) the signature of the purchaser; and
(F) the date of the purchase.
(3) The properly completed Exemption Certificate for
Qualifying Data Centers or Qualifying Large Data Center Projects is
the seller's documentation that it made a tax-exempt sale in good
faith. The seller is required to keep the exemption certificate and
all other financial records relating to the exempt sale, including
records to document the seller's collection of the local sales and
use tax for qualifying data centers. The seller must be able to match
invoices of tax-exempt sales to the purchaser's exemption certificate.
This may be accomplished by the seller entering the purchaser's registration
number on each invoice.
(4) A seller is not required to accept an exemption
certificate from a qualifying data center or qualifying large data
center project. If a seller chooses not to accept an exemption certificate
issued by a purchaser, the purchaser may instead request a refund
of the tax paid from the comptroller. Sellers shall provide an Assignment
of Right to Refund, Form 00-985, when the exemption is not provided
to a qualifying owner, qualifying operator, or qualifying occupant
when qualifying purchases of tangible personal property are made.
(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).
|
