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North Dakota: New Sales Tax Exemption for Data Centers


 The North Dakota capitol.

Legislation recently enacted in North Dakota creates a new sales and use tax exemption for enterprise information technology equipment and computer software used in a limited number of qualified data centers.

Effective retroactively to December 31, 2014 and through December 31, 2020, the following are sales and use tax exempt:

  • “Gross receipts from sales of enterprise information technology equipment and computer software purchased for use by a qualifying business in a qualified data center.”
  • “Purchases of upgraded or replacement information technology equipment and computer software for use in a qualified data center.”

In order to qualify for the exemption, “future owners of a proposed data center must apply to the tax commissioner to be certified as a qualified data center.” The exemption is, however, “limited to the first four facilities approved by the tax commissioner as qualified data centers.”

Those data centers granted the exemption will be given “a certificate that the enterprise information technology equipment or computer software which the qualified business intends to purchase qualifies for the exemption.” Sales tax must be paid on qualifying purchases made prior to the receipt of the certificate, and then a refund may be sought.

Additional details are available in the text of HB 10889.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.