§ 57-39.2-04.17 — Sales and use tax exemption for enterprise information technology equipment and computer software used in a qualified data center (Retroactive application - See note)

North Dakota § 57-39.2-04.17

• Jurisdiction: North Dakota
• Title 57: Taxation
• Ch. 57-39.2: Sales Tax

Text

equipment and computer software used in a qualified data center. (Retroactive
application - See note)
1. Gross receipts from sales of enterprise information technology equipment and
computer software purchased for use by a qualifying business in a qualified data
center are exempt from the tax imposed by this chapter. To qualify for the exemption,
the enterprise information technology equipment or computer software must be
incorporated into or physically located within the qualified data center. Purchases of
upgraded or replacement enterprise information technology equipment and computer
software for use in a qualified data center also are exempt.
2. The future owner of a proposed data center shall apply to the tax commissioner to be
certified as a qualified data center. An applicant shall respond to a request for
additional information from the tax commissioner within thirty days of the request or
the application may no longer be considered.
3. To receive the exemption at the time of purchase, the qualified business shall obtain
from the tax commissioner a certificate that the enterprise information technology
equipment or computer software the qualified business intends to purchase qualifies
for the exemption. If a certificate is not received before the purchase, the qualified
business shall pay the applicable tax imposed by this chapter and apply to the tax
commissioner for a refund.
4. If the enterprise information technology equipment is purchased or installed by a
contractor subject to the tax imposed by this chapter, the qualified business may apply
for a refund of the difference between the amount remitted by the contractor and the
exemption imposed or allowed by this section. Application for a refund must be made
at the times and in the manner directed by the tax commissioner and must include
sufficient information to permit the tax commissioner to verify the sales and use taxes
paid and the exempt status of the sale or use.
5. For purposes of this section:
a. "Computer software" includes software used or loaded at a qualified data center,
software maintenance, software licensing, and software customization.
b. "Data center" means a centralized repository for the storage, management, and
dissemination of electronic data and information organized around a particular
body or bodies of knowledge.
c. "Enterprise information technology equipment" includes:
(1) Computer hardware, servers, routers, cooling systems, and cooling towers.
(2) Temperature control infrastructure and power infrastructure used for
transformation, distribution, or management of electricity used for the
maintenance and operation of a qualified data center.
(3) Exterior dedicated business-owned substations, backup power generation
systems, battery systems, or other related infrastructure.
(4) Racking systems, raised flooring, cabling, or trays necessary for the
maintenance and operation of a qualified data center.
d. "Qualified business" means the owner, operator, or tenants of a qualified data
center.
e. "Qualified data center" means a newly constructed or substantially refurbished
facility located in this state:
(1) Comprised of one or more buildings, the primary purpose of which is to
contain a data center, consisting of an aggregate amount of fifteen thousand
square feet [1394 square meters] or more, no fewer than fifty percent of
which is used for data processing;
(2) Located on a single parcel or on contiguous parcels;
(3) On which construction is completed or which is substantially refurbished
after December 31, 2020;
(4) Having the following attributes:
(a) Sophisticated fire suppression and prevention systems; and

(b) Enhanced security with security features, including video camera
surveillance; an electronic system requiring pass codes, key cards, or
biometric scans, such as hand scans or retinal or fingerprint
recognition to restrict access to selected personnel; or other similar
security features; and
(5) Certified by the tax commissioner as a qualified data center.
f. "Substantially refurbished" means a data center used to house enterprise
information technology equipment in which fifteen thousand square feet [1394
square meters] or more has been rebuilt, modified, or improved through methods,
including energy efficiency improvements, building improvements, and the
installation of enterprise information technology equipment, environmental
controls, and computer software.
6. In determining the total square footage of a qualified data center, the square footage of
office space, meeting space, mechanical space, and other support facility spaces must
be included if those spaces are used to support the operation of enterprise information
technology equipment.
7. Qualified data center owners that intend to collocate operators or tenants within the
center shall provide the operators or tenants with documentation from the tax
commissioner that the center meets the definition of a qualified data center under this
section. Operators or tenants shall obtain and submit a copy of the documentation with
all applications for sales tax exemption on information technology equipment and
computer software purchased for use in the qualified data center.
8. By January thirty-first of each year, a qualified data center owner shall file with the tax
commissioner, on forms and in the manner prescribed by the tax commissioner, a
report showing for the previous calendar year:
a. The amount of the exemption claimed under this section;
b. The number of jobs created or retained by the qualified data center; and
c. The type and value of any local incentives provided to the qualified data center.
9. Upon receipt of a written request from the chairman of the legislative management or
the chairman of a standing committee of the legislative assembly, the tax
commissioner shall disclose any information described under subsection 8. This
subsection does not authorize disclosure of the qualified data center owner's name,
social security number, federal employer identification number, address, or any other
information prohibited from disclosure under chapter 57-38.