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LEGISLATURE
OF
THE
STATE
OF
IDAHO
Sixty-eighth
Legislature
Second
Regular
Session
-
2026
IN
THE
HOUSE
OF
REPRESENTATIVES
HOUSE
BILL
NO.
609
BY
REVENUE
AND
TAXATION
COMMITTEE
AN
ACT
1
RELATING
TO
TAXATION;
AMENDING
SECTION
63
-
3622VV,
IDAHO
CODE,
TO
REVISE
PRO
-
2
VISIONS
REGARDING
THE
IDAHO
INFORMATION
TECHNOLOGY
EQUIPMENT
SALES
TAX
3
EXEMPTION;
AMENDING
SECTION
63
-
4502,
IDAHO
CODE,
TO
LIMIT
ELIGIBILITY
4
FOR
THE
TAX
EXEMPTION
FOR
NEW
CAPITAL
INVESTMENTS
AND
TO
MAKE
TECHNICAL
5
CORRECTIONS;
AND
DECLARING
AN
EMERGENCY.
6
Be
It
Enacted
by
the
Legislature
of
the
State
of
Idaho:
7
SECTION
1.
That
Section
63
-
3622VV,
Idaho
Code,
be,
and
the
same
is
8
hereby
amended
to
read
as
follows:
9
63
-
3622VV.
IDAHO
INFORMATION
TECHNOLOGY
EQUIPMENT.
(1)
On
and
after
10
July
1,
2020,
and
before
July
1,
2036,
there
is
exempted
from
the
taxes
1
1
imposed
by
this
chapter
the
purchase
or
use
of
eligible
server
equipment
12
and
new
data
center
facilities
,
as
defined
in
this
section.
The
exemption
13
provided
in
this
section
shall
be
available
only
to
qualifying
business
14
entities
and
contractors
installing
eligible
server
equipment
or
building
15
new
data
center
facilities
for
qualifying
business
entities.
The
exemption
16
provided
in
this
section
shall
not
be
available
for
property
that
has
been
17
the
subject
of
business
incentives
granted
to
a
taxpayer
or
its
affiliates,
18
pursuant
to
the
Idaho
reimbursement
incentive
act,
sections
67
-
4737
through
19
67
-
4744,
Idaho
Code.
20
(2)
As
used
in
this
section:
21
(a)
"Business
entity"
means
a
separate
legal
entity
or
separately
oper
-
22
ated
segment
of
business
that
exists
for
the
primary
purpose
of
engaging
23
in
a
commercial
activity
for
profit
and
whose
sole
purpose
is
the
oper
-
24
ation
of
a
data
center.
For
the
purposes
of
this
section,
a
separately
25
operated
segment
of
business
is
a
segment
of
a
business
for
which
sep
-
26
arate
records
are
maintained
and
that
is
operated
by
an
employee
or
em
-
27
ployees
whose
primary
employment
responsibility
is
to
operate
the
busi
-
28
ness
segment.
29
(b)
"Cabling"
means
a
fiber
or
copper
cable
used
in
data
centers
to
con
-
30
nect
information
sources
to
a
server
or
storage
device.
31
(c)
"Capital
investment"
means
real
or
tangible
personal
property
that
32
is
purchased
for
use
in
Idaho
and
is
used
by
a
business
entity
for
the
33
purpose
of
operating
a
data
center.
34
(d)
"Chiller"
means
a
cooling
system
used
in
data
centers
to
remove
heat
35
from
an
element
and
deposit
it
into
another
element.
36
(e)
"Commencement
of
operations"
means
the
date
on
which
a
certificate
37
of
occupancy
is
issued
for
a
data
center.
38
(f)
"Data
center"
means
a
facility
comprised
of
one
(1)
or
more
build
-
39
ings
in
Idaho
that
is
used
to
house
eligible
server
equipment
for
the
40
transmission
and
storage
of
data
where
the
facility
has
the
following
41
characteristics:
42
2
(i)
Uninterruptible
power
supplies,
generator
power,
or
both;
1
(ii)
Sophisticated
fire
suppression
and
prevention
systems;
and
2
(iii)
Enhanced
physical
security
and
restricted
access.
3
(g)
"Eligible
server
equipment"
means
new
server
equipment
acquired
4
by
a
qualifying
business
entity
as
described
in
this
subsection
that
is
5
maintained
and
operated
in
a
data
center
located
in
Idaho
for
the
sole
6
purpose
of
data
transmission
and
storage
services,
providing
data
and
7
transaction
processing
services,
information
technology
services,
or
8
computer
collocation
services.
"Eligible
server
equipment"
includes
9
servers,
rack
servers,
chillers,
storage
devices,
generators,
cabling,
10
and
enabling
software
integral
to
or
installed
on
such
equipment.
1
1
(h)
"Generator"
means
an
engine
used
in
data
centers
to
convert
mechan
-
12
ical
energy
into
electricity.
13
(i)
"New
data
center
facilities"
means
buildings
or
structural
com
-
14
ponents
of
buildings,
including
equipment,
materials,
and
fixtures
15
thereof,
that
are
used
in
or
intended
for
use
primarily
as
a
data
center
16
in
Idaho.
17
(j)
(i)
"New
jobs"
means
new
jobs
created
in
Idaho
that
are
nonseasonal,
18
full
-
time
jobs
that
collectively
pay
an
average
weekly
wage
that
equals
19
or
exceeds
the
average
weekly
wage
for
the
county
where
the
data
center
20
is
located,
as
determined
by
the
most
recent
report
of
the
United
States
21
bureau
of
labor
statistics.
A
job
that
merely
changes
locations
within
22
the
state
of
Idaho
shall
not
be
considered
a
new
job
under
this
section.
23
New
jobs
must
exceed
the
business
entity's
highest
number
of
full
-
time
24
employees
in
Idaho
during
the
twenty
-
four
(24)
months
immediately
pre
-
25
ceding
the
commencement
of
operations
of
the
data
center.
26
(k)
(j)(i)
"Qualifying
business
entity"
means
a
business
entity
27
that
certifies
to
the
state
tax
commission
that
it
will
make
:
28
1.
Make
capital
investments
in
one
(1)
or
more
data
centers
29
after
July
1,
2020,
in
amounts
of
at
least
two
hundred
fifty
30
million
dollars
($250,000,000)
in
the
aggregate
within
the
31
first
five
(5)
years
after
commencement
of
construction
and
32
that
it
will
create
;
33
2.
Create
and
maintain
at
least
thirty
(30)
new
jobs
at
the
34
data
center
within
two
(2)
calendar
years
after
the
com
-
35
mencement
of
operations
.
;
36
3.
For
a
qualifying
business
entity
that
receives
an
exemp
-
37
tion
provided
in
this
section
after
March
1,
2026,
receive
38
electricity
service
under
an
electricity
rate
schedule
or
39
energy
service
agreement
that
fully
recovers
from
the
qual
-
40
ifying
business
entity
all
costs
incurred
by
the
utility
in
41
providing
electricity
to
the
property
for
which
the
exemp
-
42
tion
is
claimed;
and
43
4.
For
a
qualifying
business
entity
that
receives
an
exemp
-
44
tion
provided
in
this
section
after
March
1,
2026,
prior
to
45
commencing
construction
of
a
data
center,
provide
written
46
notice
to
the
local
water
provider
serving
such
proposed
47
data
center's
location
detailing
the
anticipated
water
con
-
48
sumption
needs
of
the
data
center
to
ensure
that
the
water
49
consumption
is
compatible
with
the
location
in
which
the
50
3
data
center
is
being
constructed.
A
qualifying
business
1
entity
is
encouraged
to
take
action
to
conserve,
reuse,
and
2
replace
water.
This
includes
but
is
not
limited
to:
3
(A)
Using
water
-
efficient
fixtures
and
practices;
4
(B)
Treating,
infiltrating,
or
harvesting
rainwater;
5
(C)
Recirculating
or
recycling
water
within
the
cool
-
6
ing
system
before
discharging;
7
(D)
Partnering
with
state
and
local
governmental
en
-
8
tities
and
private
individuals
and
entities
to
use
data
9
center
discharge
water
for
irrigation,
water
conserva
-
10
tion,
or
other
beneficial
purposes,
if
available;
1
1
(E)
Using
reclaimed
water
where
possible
for
data
cen
-
12
ter
operations;
and
13
(F)
Supporting
water
restoration
efforts
in
local
wa
-
14
tersheds.
15
(ii)
Such
business
entities
shall
be
entitled
to
a
provisional
16
exemption
pursuant
to
this
section
during
the
period
in
which
they
17
make
capital
investments
in
data
center
property.
If
a
business
18
entity
fails
to
meet
the
investment
and
job
creation
requirements
19
provided
within
the
time
periods
required
in
this
section,
it
20
shall
pay
sales
or
use
taxes
that
would
have
been
due
if
not
for
the
21
granting
of
the
provisional
exemption.
If
a
business
entity
meets
22
the
investment
and
job
creation
requirements
provided
within
the
23
time
periods
required
in
this
section,
its
provisional
exemption
24
shall
become
final
without
further
action,
and
thereafter
the
ex
-
25
emption
shall
also
apply
to
all
additional
purchases
of
eligible
26
server
equipment
and
purchases
associated
with
constructing
new
27
data
center
facilities
.
28
(l)
(k)
"Rack
server"
means
a
computer
in
a
data
center
dedicated
to
use
29
as
a
server
and
designed
to
be
installed
in
a
framework
called
a
rack.
30
(m)
(l)
"Server"
means
a
computer
or
computer
program
used
in
data
cen
-
31
ters
that
manages
access
to
a
centralized
resource
or
service
in
a
net
-
32
work.
33
(n)
(m)
"Storage
device"
means
a
piece
of
computer
equipment
on
which
34
information
can
be
stored
and
that
is
used
in
data
centers.
35
(3)
If
any
taxpayer
receives
the
exemption
provided
in
section
63
-
4502,
36
Idaho
Code,
on
any
property
owned
by
the
taxpayer
in
the
state
of
Idaho,
such
37
taxpayer
shall
not
be
eligible
for
the
exemption
provided
in
this
section.
38
(3)
(4)
The
state
tax
commission
may
promulgate
rules
to
administer
39
and
enforce
the
provisions
of
this
section,
including
the
promulgation
of
40
rules
relating
to
the
provision
of
information
necessary
to
certify
that
the
41
taxpayer
satisfies
the
criteria
for
a
qualifying
business
entity.
For
the
42
purpose
of
carrying
out
its
duties
to
administer
and
enforce
the
provisions
43
of
this
section,
the
state
tax
commission
shall
have
the
powers
and
duties
44
provided
by
sections
63
-
217,
63
-
3038,
63
-
3039,
63
-
3042
through
63
-
3067,
45
63
-
3068,
63
-
3071,
and
63
-
3074
through
63
-
3078,
Idaho
Code.
46
SECTION
2.
That
Section
63
-
4502,
Idaho
Code,
be,
and
the
same
is
hereby
47
amended
to
read
as
follows:
48
4
63
-
4502.
TAX
EXEMPTION
FOR
NEW
CAPITAL
INVESTMENTS.
(1)
For
calendar
1
years
beginning
on
or
after
January
1,
2008,
the
net
taxable
value
of
all
2
property
of
a
taxpayer,
whether
acquired
before,
during
or
after
the
qual
-
3
ifying
period,
in
excess
of
four
hundred
million
dollars
($400,000,000)
lo
-
4
cated
within
a
single
county
in
Idaho
shall
be
exempt
from
property
taxation
5
and
any
special
assessment,
but
only
if
the
taxpayer
makes
a
qualifying
new
6
capital
investment
as
defined
in
subsection
(2)
of
this
section.
7
(2)
For
purposes
of
this
section,
the
following
definitions
shall
ap
-
8
ply:
9
(a)
"Qualifying
new
capital
investment"
means
an
investment
of
at
least
10
one
billion
dollars
($1,000,000,000)
made
during
the
qualifying
period
1
1
by
the
acquisition,
construction,
improvement
or
installation
of
real,
12
operating
or
personal
property
related
to
new
plant
and
building
facil
-
13
ities
at
a
project
site
located
within
the
county
referred
to
in
subsec
-
14
tion
(1)
of
this
section.
15
(b)
"New
plant
and
building
facilities"
means:
16
(i)
Qualified
investments
as
defined
in
section
63
-
3029B,
Idaho
17
Code;
or
18
(ii)
Buildings
or
structural
components
of
buildings,
includ
-
19
ing
equipment,
materials
and
fixtures
thereof,
whether
used
at
a
20
project
site
or
temporarily
stored
off
-
site
in
the
county
referred
21
to
in
subsection
(1)
of
this
section
and
intended
for
use
at
a
22
project
site.
23
(c)
"Qualifying
period"
means
an
eighty
-
four
(84)
month
period
of
time
24
beginning
with
the
issuance
of
a
building
permit
for
a
permanent
build
-
25
ing
structure
at
a
project
site
and
ending
no
later
than
eighty
-
four
26
(84)
months
a
thereafter.
27
(d)
"Project
site"
means
an
area
or
areas
at
which
the
new
plant
and
28
building
facilities
described
in
subsection
(2)
paragraph
(b)
of
this
29
sub
section
are
built,
installed
or
constructed.
30
(3)
The
property
included
in
the
calculation
for
purposes
of
determin
-
31
ing
a
qualifying
new
capital
investment
value
shall
include
all
real
or
op
-
32
erating
property
owned,
and
all
personal
property
owned,
leased
or
rented.
33
With
respect
to
leased
or
rented
personal
property,
only
that
portion
of
the
34
property
for
which
a
taxpayer
is
contractually
liable
for
payment
of
prop
-
35
erty
taxes
thereon
shall
be
included
in
the
calculation
of
the
investment.
36
(4)
Notwithstanding
the
exemption
provided
in
subsection
(4)
of
sec
-
37
tion
63
-
3029B,
Idaho
Code,
no
other
exemption
from
property
tax
or
any
spe
-
38
cial
assessment
provided
by
the
statutes
of
this
state
shall
be
applicable
39
to
any
property
described
in
subsection
(2)
of
this
section
with
respect
to
a
40
year
in
which
the
incentives
set
forth
in
subsection
(1)
of
this
section
ap
-
41
ply
to
any
of
the
same
property.
42
(5)
Property
subject
to
the
provisions
of
this
section
shall
not
be
43
included
on
any
property
roll
or
any
new
construction
roll
prepared
by
the
44
county
assessor
in
accordance
with
section
63
-
301
or
63
-
301A,
Idaho
Code,
45
respectively.
46
(6)
If
a
taxpayer
receives
the
exemption
provided
in
section
63
-
3622VV,
47
Idaho
Code,
such
taxpayer
shall
not
be
eligible
for
the
exemption
provided
in
48
this
section
on
any
property
owned
by
the
taxpayer
in
the
state
of
Idaho.
49
5
(6)
(7)
The
state
tax
commission
shall
adopt
all
rules
that
may
be
nec
-
1
essary
to
implement
the
provisions
of
this
section.
2
SECTION
3.
An
emergency
existing
therefor,
which
emergency
is
hereby
3
declared
to
exist,
this
act
shall
be
in
full
force
and
effect
on
and
after
its
4
passage
and
approval.
5