Washington data centers lose tax exemptions starting July 1: What to know

[cbabe]

https://www.yakimaherald.com/news/northwest/washington-data-centers-lose-tax-exemptions-starting-july-1-what-to-know/article_5d16461c-6ba6-57c5-a4f7-a33a31900843.html

Washington data centers lose tax exemptions starting July 1: What to know

Ann Duan from The Seattle Times Jul 1, 2026

As of Wednesday, Washington data centers no longer qualify for tax exemptions on equipment repairs and refurbishment, including on labor-related costs.

Previously, data centers in the state could qualify for tax exemption certificates covering the purchase and installation of server equipment and power infrastructure. A June 2022 state law had expanded eligibility to include data centers in urban counties.

Now, rural and non-rural data centers, including those which previously had qualified for tax exemptions, are not able to receive or renew those benefits under S.B. 6231, a new law which took effect last month. This means data centers will be required to pay the state’s 6.5 percent sales tax on structural replacements and repairs, including the labor costs associated with these installations.

Sponsored by Senators Noel Frame, D-Seattle, and Bob Hasegawa, D-Tukwila, the law aims to remove these tax exemptions to help block private interests from leveraging tax benefits, supporters say.

… more …

[WSHazel]

1. Data Centers could be heading for a reckoning

This sector is on its way to significant overcapacity, which will kill all of them. I would be surprised if even half of the data centers that have been announced are ever built. Meta and SpaceX trying to sell their compute capacity is a big sell signal.