Arizona offers significant tax incentives to encourage the development and expansion of data centers, particularly in the Phoenix metropolitan area, including Maricopa County. The primary incentive is the Computer Data Center (CDC) Program, established in 2013 and extended through 2033.
Key Features of the CDC Program:
Tax Exemptions: The program provides exemptions from Transaction Privilege Tax (TPT) and Use Tax at the state, county, and local levels on qualifying purchases of data center equipment.
Eligibility Criteria:
Capital Investment Requirements:
For data centers in Maricopa County (an urban area), a minimum capital investment of $50 million is required within five years of certification.
For data centers in counties with populations of 800,000 or fewer, the required investment is $25 million.
Certification: Applicants must submit an application and receive a Letter of Certification from the Arizona Commerce Authority (ACA).
Duration of Exemptions:
Standard projects receive exemptions for up to ten full calendar years following the year of certification.
Projects qualifying as Sustainable Redevelopment Projects are eligible for exemptions for up to 20 full calendar years.
Expanded Scope: The program now includes exemptions not only for the sale of data center equipment but also for its use, installation, assembly, repair, or maintenance.
These incentives are designed to make Arizona, and specifically the Phoenix metro area, an attractive location for data center operations by reducing tax burdens and encouraging substantial capital investments. For detailed information and application procedures, interested parties should consult the Arizona Commerce Authority’s official resources.
