Effective July 1, 2020, Maryland will exempt the sale of certain property for use in qualifying data centers. Those wishing to claim the exemption must first apply to the Maryland Department of Commerce for approval.
Successful applicants must fulfill investment and employment requirements within 3 years of application. Data centers located in "Tier I areas" must invest $2,000,000 in qualifying data center property and create at least 5 qualified positions. "Tier I area" means (1) an opportunity zone, or (2) a county that qualifies as a "Tier I county" based on unfavorable unemployment data. Data centers outside of Tier I areas must invest $5,000,000 in qualifying data center property and create at least 5 qualified positions. "Qualified positions" means positions that are full-time, pay at least 150% of the state minimum wage, and are created because of a new or expanded data center in a single location.
The term "qualifying data center personal property" includes three categories of property. First, the term includes computers, servers, other hardware, and software used in data center operations. Second, the term includes heating, ventilation, air-conditioning, and other mechanical systems used in data center operations. Third, the term includes items used for the generation of electricity.