Kansas recently enacted Senate Bill 98 in a strategic step to position itself as a competitive destination for high-tech investment. The new law provides a 20-year exemption on qualifying purchases tied to the remodeling, acquisition, construction, and operation of Kansas data centers. With this move, Kansas joins states such as Texas, Minnesota, Washington, Georgia, Michigan, and Tennessee in offering targeted tax incentives designed to promote data center development.
What purchases qualify for the Kansas data center exemption? Eligible expenditures include land improvements, buildings, IT equipment, lease payments, engineering and design services, as well as labor for installation and maintenance. Additionally, qualified firms must commit to water conservation practices, and firms must purchase electricity for 10 years from the public utility certified in the service territory of the data center.
To qualify for the exemption, businesses must:
The Kansas Department of Commerce is responsible for program oversight and periodic review every five years. The exemption does not apply to telecommunications, wireless, or video service providers.
Kansas’s initiative highlights a broader trend in state tax policy: adapting to the growing demands of cloud computing, artificial intelligence, and other technology-driven industries. (S.B. 98, Signed by Governor Laura Kelly April 24, 2025)