Oklahoma Enacts Exemption for Machinery Used in Digital Asset Mining

Effective November 1, 2024 and ending on December 31, 2029, Oklahoma has enacted a sales tax exemption for sales of machinery and equipment and electricity used for commercial mining of digital assets purposes in a colocation facility. Machinery and equipment include but are not limited to servers and computers, racks, power distribution units, cabling, switchgear, transformers, substations, software, and network equipment.

Per the legislation, “commercial mining of digital assets” means the process through which blockchain technology is used to mine digital assets at a colocation facility. “Digital assets” means a type of virtual currency that utilizes blockchain technology and that can be digitally traded between users or can be converted or exchanged for legal tender.

The legislation notes that a “colocation facility” means a facility located in the state and is utilized in the commercial mining of digital assets or in hosting persons engaged in the commercial mining of digital assets through utilization of the facility’s infrastructure. However, no facility will qualify as a “colocation facility” unless the facility has entered into a load reduction agreement, which is an agreement between the customer and the local electric cooperative, municipality, electric utility, or market operator to temporarily reduce or curtail the customer’s use of electric power to respond to inclement weather or other adverse conditions. (H.B. 1600, Laws 2024, effective November 1, 2024)

Posted on July 5, 2024