Data processing services centers-tax exemptions.

WORKING DRAFT

ORIGINAL HOUSE
BILL

NO.
0117

ENROLLED ACT NO. 17, HOUSE OF REPRESENTATIVES

SIXTY-FIRST LEGISLATURE OF THE STATE OF
WYOMING
2011 GENERAL SESSION

AN ACT relating to sales and use taxes;
modifying the requirements for
an exemption from sales and use taxes for computer software of data processing services centers;
providing for additional sales and use tax exemptions for
data processing services centers
; specifying requirements for the exemptions;

requiring reports;
and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.

W.S. 39
‑
15
‑
105(a)(viii)(S) and 39
‑
16
‑
105(a)(viii)(H) are amended to read:

39
‑
15
‑
105.

Exemptions.

(a)

The following sales or leases are exempt from the excise tax imposed by this article:

(viii)

For the purpose of exempting sales of services and tangible personal property as an economic incentive, the following are exempt:

(S)

Subject to meeting the applicable provisions of this subparagraph, the following purchases by a data processing services center as defined in W.S. 39
‑
15
‑
101(a)(xliv):

(I)

The sales price paid for the purchase or rental of qualifying
prewritten and other computer software,
computer equipment including computers, servers, monitors, keyboards, storage devices
, containers used to transport and house such computer equipment

and other peripherals, racking systems, cabling and trays that are necessary for the operation of a data processing services center when the aggregate purchase of the qualifying equipment exceeds two million dollars ($2,000,000.00)
in
any calendar year
;
.

(II)

The sales price paid for the purchase or rental of qualifying
uninterruptable power supplies, back-up power generators, specialized heating and air conditioning equipment and air quality control equipment use
d
for controlling the computer environment necessary for the operation of a data
processing services center when the aggregate purchase of the qualifying equipment exceeds two million dollars ($2,000,000.00) in any calendar year
;

(I
II
)

For the purpose of claiming
this exemption

the exemptions in subdivisions (I) and (II) of this subparagraph
, the purchaser shall demonstrate to the department that he:

(I)
(
1
)

Has a physical location in this state where the qualifying
computer

equipment
purchased shall be maintained and operated until the qualifying
computer

equipment is scheduled for replacement or until it has reached the end of its serviceable life;

(II)
(
2
)

S
hall make an initial total capital asset investment in a physical location in this state
:

a.

For the exemption in subdivision (I) of this subparagraph,

of
not less than five million dollars ($5,000,000.00) or has made a capital investment in a physical location in this state of not less than five million dollars ($5,000,000.00) in the five (5) years immediately preceding
the effective date of this subparagraph

March 5, 2010
;

b.

For the exemption in subdivision (II) of this subparagraph, of not less than fi
fty
million dollars ($5
0
,000,000.00) or has made a capital investment in a physical location in this state of not less than fi
fty
million dollars ($5
0
,000,000.00) in the five (5) years immediately preceding
April 1
, 201
1
.

(III)
(
3
)

Has retained adequate documentation to demonstrate that the total
purchase of qualifying computer equipment exceeds

qualifying purchases exceed

the
applicable

annual threshold
of two million dollars ($2,000,000.00)

for each exemption claimed under this subparagraph
;

(IV
)
(
4
)

Has received
annual

certification from the Wyoming business council that the purchaser has created or will create a number of jobs in Wyoming that is appropriate to the size and stage of development of the data processing services center as determined by the Wyoming business council;

(V)
(
5
)

Will accrue the excise tax on
purchase of

otherwise qualifying
computer equipment

purchases
where the
applicable

annual threshold
of two million dollars ($2,000,000.00
)
was not met. The tax shall be remitted to the department not later than the end of January immediately following the end of the calendar year where the threshold was not met to avoid the assessment of penalty and interest on any amount of tax due;

(VI)
(
6
)

Shall keep adequate written records and documentation in accordance with department rule and regulation to show compliance with the requirements of this subparagraph. If the purchaser does not meet all the requirements of this subparagraph, any tax owed shall be remitted to the department not later than the end of January immediately following the end of the calendar year in which the requirements were not met.

(
I
V)

For the purpose of claiming the
exemptions in subdivisions (I) and
(II) of this subparagraph, for data centers where more than one
(1) entity
occupies the facility
but offer data services as a single entity
, the purchaser shall demonstrate that all the requirements of subdivision (I
II
) are met in the aggregate by the
entities
occupying the facility regardless of multiple ownerships of equipment and buildings.

39
‑
16
‑
105.

Exemptions.

(a)

The following purchases or leases are exempt from the excise tax imposed by this article:

(viii)

For the purpose of exempting sales of services and tangible personal property as an economic incentive, the following are exempt:

(H)

Subject to meeting the applicable provisions of this subparagraph, the following purchases by a data processing services center as defined in W.S. 39
‑
15
‑
101(a)(xliv):

(I)

The sales price paid for the purchase or rental of qualifying
prewritten and other computer software,

computer equipment including computers, servers, monitors, keyboards, storage devices
,

containers used to transport and house such computer equipment
,
and other peripherals, racking systems, cabling and trays that are necessary for the operation of a data processing services center when the aggregate purchase of the qualifying computer equipment exceeds two million dollars ($2,000,000.00) in any calendar year
;
.

(II)

The sales price paid for the purchase or rental of qualifying
uninterruptable power supplies, back-up power generators, specialized heating and air conditioning equipment and air quality control equipment use
d
for controlling the computer environment necessary for the operation of a data
processing services center when the aggregate purchase of the qualifying equipment exceeds two million dollars ($2,000,000.00) in any calendar year
;

(I
II
)

For the purpose of claiming
this exemption

the exemptions in subdivisions (I) and (II) of this subparagraph
, the purchaser shall demonstrate to the department that he:

(I)
(
1
)

Has a physical location in this state where the qualifying
computer

equipment
purchased shall be maintained and operated until the qualifying
computer

equipment is scheduled for replacement or until it has reached the end of its serviceable life;

(II)
(
2
)

S
hall make an initial total capital asset investment in a physical location in this state
:

a.

For the exemption in subdivision (I) of this subparagraph,

of not less than five million dollars ($5,000,000.00) or has made a capital investment in a physical location in this state of not less than five million dollars ($5,000,000.00) in the five (5) years immediately preceding
the effective date of this subparagraph

March 5, 2010
;

b.

For the exemption in subdivision (II) of this subparagraph, of not less than fi
fty
million dollars ($5
0
,000,000.00) or has made a capital investment in a physical location in this state of not less than fi
fty
million dollars ($5
0
,000,000.00) in the five (5) years immediately preceding
April 1
, 201
1.

(III)
(
3
)

Has retained adequate documentation to demonstrate that the total
purchase of qualifying computer equipment exceeds

qualifying purchases exceed

the
applicable

annual threshold
of two million dollars ($2,000,000.00)

for each exemption claimed under this subparagraph
;

(IV)
(
4
)

Has received
annual

certification from the Wyoming business council that the purchaser has created or will create a number of jobs in Wyoming that is appropriate to the size and stage of development of the data processing services center as determined by the Wyoming business council;

(V)
(
5
)

Will accrue the excise tax on
purchase of

otherwise qualifying
computer equipment

purchases
where the
applicable

annual threshold
of two million dollars ($2,000,000.00
)
was not met. The tax shall be remitted to the department not later than the end of January immediately following the end of the calendar year where the threshold was not met to avoid the assessment of penalty and interest on any amount of tax due;

(VI)
(
6
)

Shall keep adequate written records and documentation in accordance with department rule and regulation to show compliance with the requirements of this subparagraph. If the purchaser does not meet all the requirements of this subparagraph, any tax owed shall be remitted to the department not later than the end of January immediately following the end of the calendar year in which the requirements were not met.

(
I
V)

For the purpose of claiming the
exemptions in subdivisions (I) and
(II) of this subparagraph, for data centers where more than one
(1) entity
occupies the facility
but offer data services as a single entity
, the purchaser shall demonstrate that all the requirements of subdivision (I
II
) are met in the aggregate by the
entities
occupying the facility regardless of multiple ownerships of equipment and buildings.

Section 2.

(
a
)

If requested by the department of revenue, any person utilizing the exemption shall report to the department annually the amount of excise tax exempted under W.S. 39
‑
15
‑
105(a)(viii)(S) and 39
‑
16
‑
105(a)(viii)(H). The department shall report the total dollars under this exemption to the
Wyoming
business council. The council shall report to the joint minerals, business and economic development interim committee and the joint revenue interim committee on or before December 1 every four (4) years on the total amount of taxes exempted, the number of jobs created or impacted by the utilization of the exemption.
The report shall evaluate the cumulative effects of
the
exemption that is in effect from initiation of the exemption and shall include:

(i)

A history of employment in terms of numbers of employees, full-time and part-time employees and rates of turnover

classified by the 2007 edition of the North American Industry Classification System (NAICS) code
, as amended,

data processing section 518210
from information collected by the department of employment
;

(ii)

A history of employment in terms of numbers of employees, full-time and part-time employees and rates of turnover;

(iii)

A comprehensive history of taxes paid to the state of
Wyoming
, including any property taxes paid.

Section
3
.

This act is effective immediately upon co
m
pletion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constit
u
tion.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the House.

Chief Clerk

1