On March 13, 2013, Governor Robert McDonnell signed into law Virginia House Bill 1699, which amends Va. Code. Ann. §58.1-3506. This legislation permits Virginia localities to set a lower personal property tax rate on computer equipment and peripherals used in a “data center.” H.B. 1699 defines a data center as a:
facility whose primary services are the storage, management, and processing of digital data and is used to house
i) computer and network systems, including associated components such as servers, network equipment and appliances, telecommunications, and data storage systems;
(ii) systems for monitoring and managing infrastructure performance;
(iii) equipment used for the transformation, transmission, distribution, or management of at least one megawatt of capacity of electrical power and cooling, including substations, uninterruptible power supply systems, all electrical plant equipment, and associated air handlers;
(iv) Internet-related equipment and services;
(v) data communications connections;
(vi) environmental controls;
(vii) fire protection systems; and
(viii) security systems and services.
The expected next step for Northern Virginia localities that seek to attract high-technology companies is to update their business personal property tax ordinances with this new classification along with a new lower rate. We will update our blog once this law change is reflected at the local level.
If you have any questions, please contact Amol Jain at AmolJain@brg-expert.com or 202.480.2678.
The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.
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