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Read. Follow. Verify.Idaho House Bill 820 revises tax exemptions for data centers and capital investments
Last action · March 5, 2026: Reported Printed and Referred to Revenue & Taxation
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What This Bill Proposed
House Bill 820 revises sales tax exemptions for data center server equipment and limits eligibility for certain property tax exemptions for major capital investments, taking effect on April 1, 2026. The legislation requires qualifying data centers constructing on or after April 1, 2026, to fully cover utility electricity costs and provide advance written notice of anticipated water consumption to local water providers and the Department of Water Resources. Additionally, the measure establishes annual and periodic reporting requirements for the State Tax Commission regarding foregone sales tax revenue, created jobs, and the impact of data centers on local electricity and water resources.
Data center operators seeking tax exemptions face new requirements regarding electricity rate recovery and water usage notification, while the State Tax Commission must monitor and report on how these facilities affect local resource availability and tax revenues.
Who It Would Have Affected
Groups the bill's text would have affected, as described in the record. Being affected is not a position for or against it.
Qualifying business entities operating data centers
Data center operators must meet new electricity cost recovery rules and water notification requirements to qualify for sales tax exemptions.
Local water providers
Local water providers receive advance written notices detailing anticipated water consumption needs from proposed data centers.
Electric utilities
Electric utilities must provide service under rate schedules or energy service agreements that fully recover all costs incurred in supplying electricity to qualifying data centers.
Key Facts
- For data centers commencing construction on or after April 1, 2026, the sales tax exemption applies only to eligible server equipment.
- Qualifying business entities receiving the exemption on or after April 1, 2026, must receive electricity service under a rate schedule that fully recovers all utility costs incurred in providing electricity to the property.
- Qualifying businesses receiving the exemption on or after April 1, 2026, must provide written notice detailing anticipated water consumption needs to local water providers and the Department of Water Resources prior to commencing construction.
- Starting in 2027, the State Tax Commission must report annually by February 1 on the approximate amount of sales tax revenue foregone in the previous calendar year.
Show all 7 facts
- Starting in 2032 and every five years thereafter, the State Tax Commission must report on direct job creation, capital investment totals, and the impact of data center electricity and water usage on local availability and prices.
- Taxpayers receiving the data center sales tax exemption for facilities commencing construction on or after April 1, 2026, are not eligible for the major capital investment property tax exemption under Section 63-4502, Idaho Code.
- The legislation makes technical corrections and provides an emergency effective date of April 1, 2026.
Frequently Asked Questions
What new obligations do data centers face regarding water usage under House Bill 820?
How does the bill affect electricity pricing for data centers?
What reporting is required from the State Tax Commission?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
This bill did not become law - Died at adjournment · in House committee.
Procedural history
2 actions- Mar 5, 2026CommitteeReported Printed and Referred to Revenue & Taxation
- Mar 4, 2026IntroducedIntroduced, read first time, referred to JRA for Printing
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Stricter Conditions for Data Center Tax Exemptions
The bill shifts Idaho's data center tax incentive policy by adding mandatory utility cost recovery and water consumption notification requirements for new facilities starting April 1, 2026.
Connected Entities
Sources
legislature.idaho.gov
Analysis Score
0–100- Significance20Lowered because this bill did not pass (its text scored 75)
- Controversy50Intensity of disagreement among stakeholders
- Entertainment10Compellingness for a non-policy-wonk reader
- Buzz35Current news / social attention level
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