Do data centers pay taxes?

Do data centers pay taxes?

The capital-intensive nature of a data center will trigger relatively high sales taxes and property taxes. Property taxes are typically payable for both real estate and personal property (or equipment).

What services are exempt from sales tax in Arizona?

Cleaning services, landscaping services, parking, and repair services are also subject to tax in many states. More “white collar” services, such as accounting, legal, and medical services, are generally exempt.

Why are data centers in Arizona?

The major reasons for this jump in data center activity are Arizona’s lack of natural disasters, affordable land, abundant and affordable power, and being located on major fiber optic transmission lines, which are vital to data center operations.

Is Arizona sales tax free?

Arizona has a lower-than-average state sales tax rate of 5.6%, but the actual combined sales tax rates are higher than average when local sales taxes from Arizona’s 80 local tax jurisdictions are taken into account. Arizona has a statewide transaction privilege tax rate of 5.6%, which has been in place since 1933.

Is software taxable in Arizona?

The Arizona Department of Revenue (Department) issued a taxpayer information ruling stating that a taxpayer’s gross income from transactions provided through the use of computer software is not subject to tax under the personal property rental classification for Arizona Transaction Privilege Tax purposes.

What is not taxable in Arizona?

In Arizona, certain items may be exempt from the sales tax to all consumers, not just tax-exempt purchasers. Some examples of exceptions to the sales tax are certain types of groceries, some medical devices, certain prescription medications, and any machinery and chemicals which are used in research and development.

How many data centers are in Arizona?

There are currently 28 providers and 41 data centers in Arizona.

How many data centers are in Phoenix?

38 data centers
There are currently 23 providers and 38 data centers in Phoenix.

Is there tax on services in AZ?

The state sales tax rate in Arizona is 5.6%. To calculate the full tax rate, including the rate for local taxes, use the TaxJar sales tax calculator. Services in Arizona are generally not taxable.

What is taxed in AZ?

Arizona has a combined sales tax. The state charges 5.6 percent, and localities impose a 2.8 percent rate….Arizona sales tax rate: Table.

Is SaaS taxable in AZ?

Arizona does impose sales and use tax on SaaS and cloud computing. Prewritten computer software or “canned software,” which includes software that may have originally been written for one specific customer but becomes available to others, are also taxable and considered sales of tangible personal property.

Are digital goods taxable in Arizona?

Arizona broadly defines tangible personal property. Digital goods are considered included in that definition by Arizona DOR and are taxable in Arizona as tangible personal property.