Proposal ties data center equipment tax breaks to investment and energy rules

The proposal would let the Michigan Strategic Fund certify facilities for an equipment use tax exemption. The exemption covers equipment bought by a certified facility's qualified entity or affiliates, and equipment contractors install as part of that facility. A facility must meet requirements that include at least $250 million in investment, 30 new full-time jobs paid at least 150% of the local region's median wage, and other energy, water, and building standards. Local governments affected by a property tax benefit must approve it. The Fund may issue new certificates only through December 31, 2029; existing certificates on that date are not affected. The exemption period runs from the effective date of the earlier act that added this subsection through December 31, 2050, or through December 31, 2065, for facilities on specified brownfield or former power plant sites.

The proposal would exempt certain equipment used by qualified data centers and their colocated businesses from use tax. It covers equipment bought for a qualified data center's operations by its owner, operator, or a colocated business, and equipment contractors install as part of the center. To continue the exemption after January 1, 2026, certified job counts must show at least 1,000 data center industry or related jobs established in Michigan since January 1, 2016. The text also sets a 400-job threshold for continuing the exemption after January 1, 2022. The stated exemption period runs from January 1, 2016, through December 31, 2050. The job-count tests apply to continuing it after January 1, 2022, and January 1, 2026.