Data Center Refunds

Opportunity: Many states have enacted legislation for the investment of capital for data and network centers.  For example, in 2013 the Minnesota Department of Revenue – sales and use tax division, added refund incentives for corporations that build data or network operation centers. Not unlike the former Minnesota capital equipment sales tax code, taxes for qualifying transactions are paid at the time of the transaction and then may be refundable depending upon the type of project undertaken to complete the investment. To qualify, a project must meet certain size and investment thresholds.

Implementation: ThreeFive will perform a review of the data center project to navigate the acceptance of a designated data center sales tax exemption. The process starts with an application submitted to the Department of Employment and Economic Development (DEED). Upon approval by DEED, ThreeFive will perform a review of the project’s transactions by its team of former MN DOR experts to prepare a sales and use tax claim for refund. The claim for refund schedule, including invoice information, will be submitted with other required project information to the Minnesota Department of Revenue.

Results: Upon successful completion, Clients in Minnesota are granted a 20-year sales tax exemption for their eligible computer hardware, cooling and energy related equipment, energy use, and software. ThreeFive partners with our clients to deliver similar value in states offering tax savings opportunities for data and network center investments. Our business model is structured so you receive your tax benefits before ThreeFive is paid its contingency fee.

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