Committee Advances Measure to Support Hi-Tech Businesses

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The Senate Finance Committee today (March 27) approved a measure that will help develop and support high-tech businesses in Pennsylvania, according to Committee Chairman Scott Hutchinson.

Senate Bill 471, sponsored by Senator Hutchinson, establishes a sales and use tax exemption for certain equipment purchased by data centers and their tenants. The proposal is similar to sales tax exemptions for other industries in the state such as dairying, farming, manufacturing, and mining.

“This tax exemption will provide an additional incentive for companies to locate their data centers in Pennsylvania, rather than surrounding states,” said Senator Hutchinson. “We need only look at the more than $100 million of capital that Iron Mountain invested in its Boyers (Butler County) facility to see the benefits, such as good-paying jobs, that these businesses provide.”

A data center sales tax exemption was enacted in 2016 with an annual cap of $5 million. Senator Hutchinson’s proposes to replace the existing capped refund program to reduce the cost of the program and ensure even larger investments in Pennsylvania.

“My bill will help create jobs and new sustainable revenue,” Senator Hutchinson said. “It promotes economic growth; fosters Pennsylvania’s workforce development through the creation of high-paying, high-tech jobs in computer data centers and related industries.”

“Companies looking at data center outsourcing as an option have many factors to consider, including location. Part of data center location decision is weighing the cost of computer equipment including sales taxes. Currently, more than 20 states offer sales tax exemptions for data center investments. This legislation puts Pennsylvania on par with those states,” said Mark Kidd, executive vice president and general manager, Iron Mountain Data Centers, which operates data centers in nine states and four countries.

The Finance Committee also approved Senate Bill 83, a measure sponsored by Senator Scott Martin that exempts volunteer fire companies from paying sales tax on food and beverages sold for fundraising efforts.

Contact:           Justin Leventry           (717) 787-9684           jleventry@pasen.gov