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South Carolina Data Center Sales Tax Law Signed

South Carolina Governor Nikki Haley signed House Bill 3720 into law June 7, 2012. H3720 “[p]rovides a sales tax exemption on computers, computer equipment, computer hardware or software, and electricity for data centers investing at least $50 million in South Carolina over a five-year period of time.”

Computer Equipment,” according to the law, means “…original or replacement servers, routers, switches, power units, network devices, hard drives, processors, memory modules, motherboards, racks, other computer hardware and components, cabling, cooling apparatus, and related or ancillary equipment, machinery, and components, the primary purpose of which is to store, retrieve, aggregate, search, organize, process, analyze, or transfer data or any combination of these, or to support related computer engineering or computer science research."

To qualify, a data center must be a new or existing facility at a single location in South Carolina and must:

  • Provide infrastructure for hosting or data processing services
  • Have power and cooling systems that are created and maintained to be concurrently maintainable with redundant capacity OR
  • Have a single distribution path with an investment of at least $50 million in real or personal property or both over a 5-year period OR
  • Have a single distribution path with a minimum aggregate capital investment of $75 million in real or personal property over a 5-year period

The data center must create and maintain at least 25 full-time jobs for at least 3 years after creation.

The exemption is effective June 7, 2012 (immediately).

Check out what nearby Virginia is doing to keep data centers in their state: Virginia Sales Tax Law Friendly To Facebook

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”