Arkansas has increased its sales and use tax exemptions for data centers under H.B. 1444. The legislation introduces a new category: “Qualified Large Data Centers,” defined as facilities located on two or more nonadjacent properties connected by fiber and associated equipment.
The exemption now applies to a broader range of qualifying purchases and activities, including:
To qualify, a business must invest at least $2 billion within ten years of construction and provide a minimum of $3 million in annualized compensation to Arkansas-based workers in the first two years of operation. Notably, data centers primarily engaged in cryptocurrency mining are excluded from the exemption.
For tax professionals, these updates present new opportunities to secure substantial sales and use tax savings for businesses in the technology and infrastructure sectors. The strict compliance requirements and annual certification obligations necessitate careful planning and ongoing monitoring to maintain eligibility. (Ark. Gen. Assemb., 95th Gen. Assemb., Reg. Sess., H.B. 1444, Act 548, signed April 10, 2025, effective July 1, 2025)