In this article
In 2019, the Indiana legislature passed a bill that would offer eligible data centers significant sales tax exemptions. The legislation said facilities packed with state-of-the-art servers could avoid the state’s 7% tax when purchasing equipment and power.
The measure was a boon for large tech companies that have been rapidly building out data centers and was heavily backed by a trade association representing the industry.
Similar tax incentives have been passed elsewhere. Today nearly all states that have sales taxes offer data centers exemptions on computers, wires, air-conditioning units and, in some cases, even the energy required to keep it all running.
Demand for data center capacity was already soaring at the time of the Indiana legislation but has picked up exponentially since then due to the artificial intelligence boom sparked by the launch of OpenAI’s ChatGPT in 2022. Data center investment is now projected to reach $1 trillion by 2027, according to professional services network PwC.
