Florida Regulations 12A-1.108: Exemption for Data Center Property
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(1) The sale of “”data center property,”” as defined in Section 212.08(5)(s)1.d., F.S., is exempt from sales tax when the following requirements will be met:
(a) The facility meets the definition of “”data center,”” as provided in Section 212.08(5)(s)1.c., F.S.;
(b) The data center’s owners and tenants have made a cumulative, minimum capital investment, after July 1, 2017, of $150 million for the data center, excluding any expenses incurred in the acquisition of property operating as a data center in the six months prior to the acquisition.
(c) The data center must have a critical IT load of 15 megawatts or higher; and,
(d) Each individual owner or tenant within the data center must have a dedicated critical IT load of 1 megawatt or higher; and,
(e) Each of the above requirements is met within 5 years after the commencement of the construction of the data center.
(2) Application process.
(a) To qualify for the exemption for data center property, the data center owner must complete an Application for Data Center Property Temporary Tax Exemption Certificate (form DR-1214DCP, incorporated by reference in Fl. Admin. Code R. 12A-1.097). The application must state that a qualifying data center designation is being sought and must be accompanied by information that indicates the exemption requirements of subsection (1), will be met.
(b) The Department will issue a Data Center Property Temporary Tax Exemption Certificate (DR-14TDCP) upon a tentative determination by the Department that the exemption requirements provided in subsection (1), will be met.
(c) The data center owner must complete an Application for Data Center Property Certificate of Exemption (form DR-5DCP, incorporated by reference in Fl. Admin. Code R. 12A-1.097) once the exemption requirements have been met. The applicant must deliver to the Department its Data Center Property Temporary Tax Exemption Certificate, along with the following documentation sufficient to support that the exemption requirements have been satisfied:
1. Certification from a professional engineer, licensed pursuant to Florida Statutes Chapter 471, whose services are contracted solely to certify that the data center has met the critical IT load requirement;
2. Certification from a Florida certified public accountant, as defined in Florida Statutes § 473.302, whose services are contracted solely to certify that the data center owners and tenants have made the required cumulative capital investment.
(d) The Department will issue a Data Center Property Certificate of Exemption (DR-14DCP) to the data center owner once it has determined that the documentation provided certifies that the exemption requirements have been met.
(3) Documenting the exemption.
(a) Data center owners making tax-exempt purchases of data center property are required to present the Data Center Property Temporary Tax Exemption Certificate (DR-14TDCP) or the Data Center Property Certificate of Exemption (DR-14DCP), once issued by the Department, to the selling dealer.
(b) Tenants and contractors making tax-exempt purchases of data center property are required to present a copy of the Data Center Property Temporary Tax Exemption Certificate (DR-14TDCP) or the Data Center Property Certificate of Exemption (DR-14DCP), issued to the data center owner by the Department, along with a Certificate of Entitlement to each vendor to affirm that the purchaser qualifies for the exemption. The vendor must maintain copies of the certificates until tax imposed by Florida Statutes Chapter 212, may no longer be determined and assessed pursuant to Section 212.08(5)(s)3.c., F.S. Possession by a vendor of the certificate from the purchaser relieves the vendor from the responsibility of collecting tax on the sale, and the Department shall look solely to the purchaser for recovery of tax if it determines that the purchaser was not entitled to the exemption.
(c) The following is the format of the Certificate of Entitlement to be issued by the data center tenant or data center contractor when making exempt purchases of data center property:
CERTIFICATE OF ENTITLEMENT
The undersigned _____________________ (the Purchaser) affirms that it is a tenant or contractor of _______________________ (the Data Center), located at
________________________ (Data Center Address), and is eligible to extend the Data Center Property Temporary Tax Exemption Certificate/Data Center Property Certificate of Exemption to lease or purchase data center property exempt from sales tax.
The Purchaser affirms that the items purchased or rented from _______________ (Vendor) will be used exclusively at the data center to construct, outfit, operate, support, power, cool, dehumidify, secure, or protect a data center and any contiguous dedicated substations.
The Purchaser acknowledges that if the subject purchased or leased data center property does not qualify for the exemption provided in Section 212.08(5)(s), F.S., and Fl. Admin. Code R. 12A-1.108, the Purchaser will be subject to the tax, interest, and penalties due on the purchased or leased property.
I understand that if I fraudulently issue this certificate to evade the payment of sales tax, I will be liable for payment of the sales tax plus a penalty of 200% of the tax and may be subject to conviction for a third-degree felony.
Under the penalties of perjury, I declare that I have read the foregoing Certificate of Entitlement, and the facts stated in it are true.
Signature of Purchaser _____________________ Title _______________________
Purchaser’s Name (Print or Type) __________________________ Date
_______________________
Purchaser’s Federal Employer Identification Number: __________________________
Data Center Owner Certificate Number: ______________________
Telephone Number: ______________________
Do not send to the Florida Department of Revenue. This Certificate of Entitlement must be retained in the vendor’s and the tenant’s or contractor’s books and records.
(4)(a) The exemption for purchases and leases of data center property does not include rental consideration made for the lease or license to use real property subject to tax under Section 212.031. F.S. Rental consideration includes all considerations due and payable by the tenant to its landlord for the privilege of use, occupancy, or the right to use or occupy any real property for any purpose, including pass-through charges for common area maintenance and utilities, except certain electricity charges provided in paragraph (4)(b), below. See subsection 12A-1.070(4), F.A.C.
(b) The following charges for electricity are exempt as charges for “”data center property””:
1. Charges billed by the utility provider directly to a data center tenant.
2. Charges billed by the utility provider directly to a data center owner.
3. Charges billed to a data center tenant by a data center owner that are separately stated on the owner’s invoice at the same or lower price as that billed by the utility provider to the owner.
(c) To document the tax-exempt purchase of electricity as provided in paragraph (4)(b), above, the purchaser shall comply with the documentation requirements set out in subsection (3), above.
(d) Data center property includes areas, infrastructure, fixtures and furnishings to be used exclusively at the data center by persons employed at the data center provided that the employees using the areas, infrastructure, furniture and fixtures are directly responsible for the operation, monitoring, security or support of data center property.
(5) The Department will conduct a review of registered data centers every 5 years to ensure that the data center exemption requirements provided in Section 212.08(5)(s), F.S., continue to be met. The first 5-year period will begin with the date the Data Center Property Certificate of Exemption (DR-14DCP) is issued to the data center. Within 3 months before the end of any 5-year period, data center owners are required to submit a written declaration, under penalties of perjury, that the required critical IT load requirements of paragraph (1)(a), are met and that the data center continues to operate in compliance with Section 212.08(5)(s)1., F.S. The declaration should be sent to Technical Assistance and Dispute Resolution, Florida Department of Revenue, P.O. Box 7443, Tallahassee, FL 32314-7443.
(6)(a) If the Department determines that the data center or any owners, tenants, contractors, or other purchasers have not met the requirements found in Section 212.08(5)(s), F.S., with respect to any purchase, then such purchaser is liable to pay the tax that was avoided at the time of purchase, as well as penalty and interest from the date of purchase.
(b) If the Department determines that the data center is no longer in compliance with the provisions of Section 212.08(5)(s), F.S., then the Data Center Property Certificate of Exemption (DR-14DCP) will be revoked; any person who made tax exempt purchases under that certificate will liable to pay any tax that was avoided since the date the data center fell out of compliance with statutory requirements, as well as penalty and interest from the date of such purchases; and no further purchases will be exempt.
(7) Except as provided in paragraph (5)(b), the exemption provided for data center property is a permanent exemption for qualifying data centers that apply for and receive a Data Center Property Temporary Tax Exemption Certificate during the period from July 1, 2017, through June 30, 2027, and then meet all requirements for the Data Center Property Certificate of Exemption within five years. The Department will not process applications for Data Center Property Temporary Tax Exemption Certificate after June 30, 2027.
Rulemaking Authority Florida Statutes § 212.18(2), 213.06(1) FS. Law Implemented 212.08(5)(s) FS. History-New 4-16-18, 6-14-22.
Terms Used In Florida Regulations 12A-1.108
- Conviction: A judgement of guilt against a criminal defendant.
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
(b) The data center’s owners and tenants have made a cumulative, minimum capital investment, after July 1, 2017, of $150 million for the data center, excluding any expenses incurred in the acquisition of property operating as a data center in the six months prior to the acquisition.
(c) The data center must have a critical IT load of 15 megawatts or higher; and,
(d) Each individual owner or tenant within the data center must have a dedicated critical IT load of 1 megawatt or higher; and,
(e) Each of the above requirements is met within 5 years after the commencement of the construction of the data center.
(2) Application process.
(a) To qualify for the exemption for data center property, the data center owner must complete an Application for Data Center Property Temporary Tax Exemption Certificate (form DR-1214DCP, incorporated by reference in Fl. Admin. Code R. 12A-1.097). The application must state that a qualifying data center designation is being sought and must be accompanied by information that indicates the exemption requirements of subsection (1), will be met.
(b) The Department will issue a Data Center Property Temporary Tax Exemption Certificate (DR-14TDCP) upon a tentative determination by the Department that the exemption requirements provided in subsection (1), will be met.
(c) The data center owner must complete an Application for Data Center Property Certificate of Exemption (form DR-5DCP, incorporated by reference in Fl. Admin. Code R. 12A-1.097) once the exemption requirements have been met. The applicant must deliver to the Department its Data Center Property Temporary Tax Exemption Certificate, along with the following documentation sufficient to support that the exemption requirements have been satisfied:
1. Certification from a professional engineer, licensed pursuant to Florida Statutes Chapter 471, whose services are contracted solely to certify that the data center has met the critical IT load requirement;
2. Certification from a Florida certified public accountant, as defined in Florida Statutes § 473.302, whose services are contracted solely to certify that the data center owners and tenants have made the required cumulative capital investment.
(d) The Department will issue a Data Center Property Certificate of Exemption (DR-14DCP) to the data center owner once it has determined that the documentation provided certifies that the exemption requirements have been met.
(3) Documenting the exemption.
(a) Data center owners making tax-exempt purchases of data center property are required to present the Data Center Property Temporary Tax Exemption Certificate (DR-14TDCP) or the Data Center Property Certificate of Exemption (DR-14DCP), once issued by the Department, to the selling dealer.
(b) Tenants and contractors making tax-exempt purchases of data center property are required to present a copy of the Data Center Property Temporary Tax Exemption Certificate (DR-14TDCP) or the Data Center Property Certificate of Exemption (DR-14DCP), issued to the data center owner by the Department, along with a Certificate of Entitlement to each vendor to affirm that the purchaser qualifies for the exemption. The vendor must maintain copies of the certificates until tax imposed by Florida Statutes Chapter 212, may no longer be determined and assessed pursuant to Section 212.08(5)(s)3.c., F.S. Possession by a vendor of the certificate from the purchaser relieves the vendor from the responsibility of collecting tax on the sale, and the Department shall look solely to the purchaser for recovery of tax if it determines that the purchaser was not entitled to the exemption.
(c) The following is the format of the Certificate of Entitlement to be issued by the data center tenant or data center contractor when making exempt purchases of data center property:
CERTIFICATE OF ENTITLEMENT
The undersigned _____________________ (the Purchaser) affirms that it is a tenant or contractor of _______________________ (the Data Center), located at
________________________ (Data Center Address), and is eligible to extend the Data Center Property Temporary Tax Exemption Certificate/Data Center Property Certificate of Exemption to lease or purchase data center property exempt from sales tax.
The Purchaser affirms that the items purchased or rented from _______________ (Vendor) will be used exclusively at the data center to construct, outfit, operate, support, power, cool, dehumidify, secure, or protect a data center and any contiguous dedicated substations.
The Purchaser acknowledges that if the subject purchased or leased data center property does not qualify for the exemption provided in Section 212.08(5)(s), F.S., and Fl. Admin. Code R. 12A-1.108, the Purchaser will be subject to the tax, interest, and penalties due on the purchased or leased property.
I understand that if I fraudulently issue this certificate to evade the payment of sales tax, I will be liable for payment of the sales tax plus a penalty of 200% of the tax and may be subject to conviction for a third-degree felony.
Under the penalties of perjury, I declare that I have read the foregoing Certificate of Entitlement, and the facts stated in it are true.
Signature of Purchaser _____________________ Title _______________________
Purchaser’s Name (Print or Type) __________________________ Date
_______________________
Purchaser’s Federal Employer Identification Number: __________________________
Data Center Owner Certificate Number: ______________________
Telephone Number: ______________________
Do not send to the Florida Department of Revenue. This Certificate of Entitlement must be retained in the vendor’s and the tenant’s or contractor’s books and records.
(4)(a) The exemption for purchases and leases of data center property does not include rental consideration made for the lease or license to use real property subject to tax under Section 212.031. F.S. Rental consideration includes all considerations due and payable by the tenant to its landlord for the privilege of use, occupancy, or the right to use or occupy any real property for any purpose, including pass-through charges for common area maintenance and utilities, except certain electricity charges provided in paragraph (4)(b), below. See subsection 12A-1.070(4), F.A.C.
(b) The following charges for electricity are exempt as charges for “”data center property””:
1. Charges billed by the utility provider directly to a data center tenant.
2. Charges billed by the utility provider directly to a data center owner.
3. Charges billed to a data center tenant by a data center owner that are separately stated on the owner’s invoice at the same or lower price as that billed by the utility provider to the owner.
(c) To document the tax-exempt purchase of electricity as provided in paragraph (4)(b), above, the purchaser shall comply with the documentation requirements set out in subsection (3), above.
(d) Data center property includes areas, infrastructure, fixtures and furnishings to be used exclusively at the data center by persons employed at the data center provided that the employees using the areas, infrastructure, furniture and fixtures are directly responsible for the operation, monitoring, security or support of data center property.
(5) The Department will conduct a review of registered data centers every 5 years to ensure that the data center exemption requirements provided in Section 212.08(5)(s), F.S., continue to be met. The first 5-year period will begin with the date the Data Center Property Certificate of Exemption (DR-14DCP) is issued to the data center. Within 3 months before the end of any 5-year period, data center owners are required to submit a written declaration, under penalties of perjury, that the required critical IT load requirements of paragraph (1)(a), are met and that the data center continues to operate in compliance with Section 212.08(5)(s)1., F.S. The declaration should be sent to Technical Assistance and Dispute Resolution, Florida Department of Revenue, P.O. Box 7443, Tallahassee, FL 32314-7443.
(6)(a) If the Department determines that the data center or any owners, tenants, contractors, or other purchasers have not met the requirements found in Section 212.08(5)(s), F.S., with respect to any purchase, then such purchaser is liable to pay the tax that was avoided at the time of purchase, as well as penalty and interest from the date of purchase.
(b) If the Department determines that the data center is no longer in compliance with the provisions of Section 212.08(5)(s), F.S., then the Data Center Property Certificate of Exemption (DR-14DCP) will be revoked; any person who made tax exempt purchases under that certificate will liable to pay any tax that was avoided since the date the data center fell out of compliance with statutory requirements, as well as penalty and interest from the date of such purchases; and no further purchases will be exempt.
(7) Except as provided in paragraph (5)(b), the exemption provided for data center property is a permanent exemption for qualifying data centers that apply for and receive a Data Center Property Temporary Tax Exemption Certificate during the period from July 1, 2017, through June 30, 2027, and then meet all requirements for the Data Center Property Certificate of Exemption within five years. The Department will not process applications for Data Center Property Temporary Tax Exemption Certificate after June 30, 2027.
Rulemaking Authority Florida Statutes § 212.18(2), 213.06(1) FS. Law Implemented 212.08(5)(s) FS. History-New 4-16-18, 6-14-22.