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Arizona State Data Center Sales Tax Incentives

Arizona offers qualifying data centers investing at least $50 million a sales tax exemption for data center equipment.

Arizona Transaction Privilege Tax (TPT) and Use Tax Exemption Program

In 2013 the state of Arizona adopted the Transaction Privilege Tax (TPT) and Use Tax exemption program. This tax incentive allows data center owners, operators or qualified co-location tenants of a commercial data center in the state of Arizona to be excluded from paying state, county and local sales tax on equipment purchases for up to ten (10) full calendar years.

To qualify for Arizona’s tax breaks, a data center owner or operator must invest at least $50 million for projects in urban locations and $25 million in non-urban environments. Qualified companies, such as Stream Data Centers will be exempt from sales and use tax on data center-related equipment purchases for 10 years. Companies with existing data centers in Arizona that have accrued an investment of at least $250 million to the state over the past six years will also qualify for tax benefits on future purchases. Tenants may qualify for exemptions on their equipment if they commit to at least 500 KW’s of critical power capacity.

Unlike many of the data center tax-incentive bills recently enacted by other states, Arizona’s legislation does not focus solely on big-name, single-tenant data center operators, such as Google, Facebook, Apple or Amazon. These tax breaks are meant to benefit both mega-scale single-tenant projects and companies that provide colocation services out of multi-tenant facilities, such as Stream Data Centers. Qualifying for sales tax exemption is a big benefit for medium to large data center users evaluating deployments in Arizona (Phoenix), California (the Bay Area, Los Angeles, Orange County, Sacramento, San Diego and San Francisco), Idaho (Boise), New Mexico (Albuquerque), Nevada (Las Vegas and Reno), Oregon (Portland and Hillsboro), Utah (Provo and Salt Lake City), and Washington (Quincy and Seattle).

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