Refunds some IT equipment used in data centers

· Jan. 30, 2015, 9:46 pm
Photo: Unknown Impact(Photo: CPR)

This article is part of our look at potential refunds from the Taxpayer's Bill of Rights. Learn more about how TABOR works here. 

Title: HB15-1158 Sales & Use Tax Refund For Data Centers

Sponsors: Rep. Brian DelGrosso (R-Loveland), Rep. Dan Pabon (R-Denver), Sen. Chris Holbert (R-Parker)

Status: Introduced and assigned to the House Business Affair and Labor, Finance and Appropriations committees on Jan. 29. The House Business Affair and Labor Committee referred the amended bill to the Finance Committee on Feb. 26.  The Finance Committee referred an amended version of the bill to the Appropriations Committee on March 19. The Appropriations Committee referred an amended version of the bill to the whole House on April 22. The House passed its third reading on April 27. On the same day, the bill was introduced in the Senate and assigned to the Senate finance and appropriations committees. The Finance Committee referred the bill to the Appropriations Committee on April 30.

The Appropriations Committee referred the bill to the whole Senate on May 1. The Senate passed its second reading of the bill on May 5. The bill did not get a third reading on  May 6, the last day of the session.

What the bill would have done: This bill, as originally written, establishes a sales and use tax refund for equipment used to operate large data centers, including computers, power generators, and HVAC. To qualify, a company must spend at least $40 million to construct the data center. The maximum annual credit is capped at $3 million a year per recipient.

The bill has been rewritten to be a study of data center tax breaks, reports the Denver Business Journal.

How it would have affected your refund: Unknown. According to the bill's fiscal noteinformation on data center investments is limited. This bill could have reduced General Fund revenue by $10.4 million in fiscal year 2016-17; CPR is measuring fiscal year 2015-16. 

What is being said about this law: 

Ed Sealover, writing for the Denver Business Journal on April 22:

Sponsors of a bill in the Colorado Legislature that would have created tax breaks of as much as $3 million per company for data-center equipment purchases turned the bill Wednesday into a study of the issue instead.

Rep. Dan Pabon, a Denver Democrat who is sponsoring HB 1158 with Republican House Minority Leader Brian DelGrosso of Loveland, acknowledged there was some urgency to create an incentive, as 23 other states now have some sort of tax break or funding aimed specifically at data centers. But with little space in next year’s budget for a tax break that eventually would cost the state more than $11 million a year, the best they could do was to continue the conversation in a way that could aid the measure were it to return in 2016, he said.

Ed Sealover, writing for the Denver Business Journal on April 10:

But the committee delayed House Bill 1158, which would offer a sales- and use-tax refund to companies that invest at least $20 million in opening or refurbishing a data center — an effort that economic developers have said is key to letting Colorado compete for the capital-heavy storage areas of major companies’ cloud data.

And Rep. Dan Pabon, a Denver Democrat and co-sponsor of the measure, said he believes he has a way to slim down the tax break enough to make the measure acceptable to the Legislature while keeping it attractive for data-center builders.

Pabon and his co-sponsor, Republican House Minority Leader Brian DelGrosso of Loveland, have gotten HB 1158 bipartisan support in two House committees so far. Members have said they like the general policy but are worried about the cost of the tax break.


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