{"id":2542,"date":"2026-04-27T10:44:35","date_gmt":"2026-04-27T10:44:35","guid":{"rendered":"https:\/\/leyton.majjane.agency\/us\/article\/washington-removes-sales-tax-exemptions-for-data-center-equipment-replacement\/"},"modified":"2026-07-26T16:24:44","modified_gmt":"2026-07-26T14:24:44","slug":"washington-removes-sales-tax-exemptions-for-data-center-equipment-replacement","status":"publish","type":"article","link":"https:\/\/leyton.com\/us\/insights\/articles\/washington-removes-sales-tax-exemptions-for-data-center-equipment-replacement\/","title":{"rendered":"Washington Removes Sales Tax Exemptions for Data Center Equipment Replacement"},"content":{"rendered":"<p>Washington has enacted legislation under Washington Senate Bill 6231 that&nbsp;eliminates&nbsp;key sales and&nbsp;use&nbsp;tax exemptions previously available to data centers.&nbsp;<\/p>\n<p>The changes impact replacement equipment and refurbished data centers, which historically allowed ongoing exemption benefits for existing facilities.&nbsp;<\/p>\n<h2 class=\"wp-block-heading\">Removal of Replacement Equipment Exemption<\/strong>&nbsp;<\/h2>\n<p>Washington no longer treats replacement server equipment as qualifying exempt equipment.&nbsp;<\/p>\n<p>Only original server equipment installed in an eligible data center qualifies for exemption going forward.&nbsp;<\/p>\n<p>This means:&nbsp;<\/p>\n<div class=\"wp-block-leyton-orion-block-list list-block undefined\">\n<div class=\"container\">\n<div class=\"row\">\n<div class=\"col\">\n<ul>\n<li>Routine equipment refreshes and upgrades are now taxable  <\/li>\n<li>Ongoing exemption opportunities for existing data centers are significantly reduced <\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2 class=\"wp-block-heading\"><strong>Refurbished Data Centers No Longer Qualify<\/strong>&nbsp;<\/h2>\n<p>A data center that is refurbished on or after July 1,&nbsp;2026&nbsp;is no longer considered an eligible computer data center.&nbsp;<\/p>\n<p>This applies to projects&nbsp;involving:<\/p>\n<div class=\"wp-block-leyton-orion-block-list list-block undefined\">\n<div class=\"container\">\n<div class=\"row\">\n<div class=\"col\">\n<ul>\n<li>Modernization of servers  <\/li>\n<li>Upgrades to power infrastructure  <\/li>\n<li>Improvements to ventilation or facilities  <\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2 class=\"wp-block-heading\"><strong>Elimination of Refurbishment-Based Certificates<\/strong>&nbsp;<\/h2>\n<p>Washington will no longer issue <strong><a href=\"https:\/\/majjane.leyton.com\/us\/insights\/articles\/exemption-certificates-management-and-sales-tax-for-manufacturers\/\">exemption certificates<\/a><\/strong> for data centers that qualify through refurbishment after July 1, 2026. In addition, any existing refurbishment-based exemptions will expire after July 1, 2026.  <\/p>\n<h2 class=\"wp-block-heading\"><strong>Effective Dates<\/h2>\n<p><strong>June 11, 2026 \u2013<\/strong> Law becomes effective  <\/p>\n<p><strong>July 1, 2026 \u2013<\/strong> Key provisions take effect, including:  <\/p>\n<div class=\"wp-block-leyton-orion-block-list list-block undefined\">\n<div class=\"container\">\n<div class=\"row\">\n<div class=\"col\">\n<ul>\n<li>Removal of replacement equipment exemption  <\/li>\n<li>Disqualification of refurbished data centers<\/li>\n<li>Expiration of refurbishment-related benefits <\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2 class=\"wp-block-heading\"><strong>What This Means&nbsp;to Your&nbsp;Businesses<\/strong>&nbsp;<\/h2>\n<p>The exemption is now limited to first-time investments only.&nbsp;<\/p>\n<p>New data center construction and the initial installation of server equipment may still qualify for exemption.<\/p>\n<p>Any future activity, including:  <\/p>\n<div class=\"wp-block-leyton-orion-block-list list-block undefined\">\n<div class=\"container\">\n<div class=\"row\">\n<div class=\"col\">\n<ul>\n<li>Replacing servers<\/li>\n<li>Upgrading equipment <\/li>\n<li>Refurbishing existing facilities is now fully subject to sales and use tax  <\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>In other words, businesses can benefit from the <strong><a href=\"https:\/\/majjane.leyton.com\/us\/insights\/articles\/who-can-apply-for-a-sales-tax-exemption\/\">exemption<\/a><\/strong> when they build and equip a data center for the first time, but not when they upgrade or replace equipment later. <\/p>\n<h2 class=\"wp-block-heading\"><strong>Leyton\u2019s Perspective<\/strong>&nbsp;<\/h2>\n<p>These changes reduce one of the more valuable recurring exemption opportunities for data center operators.&nbsp;<\/p>\n<p>Companies with existing facilities in Washington should review upcoming capital expenditures and assess whether purchases made before July 1,&nbsp;2026&nbsp;can still qualify.&nbsp;<\/p>\n<p>If your business operates data centers in Washington, Leyton\u2019s <strong><a href=\"https:\/\/majjane.leyton.com\/us\/state-and-local-tax-s-a-l-t\/\">SALT<\/a><\/strong> team can help evaluate the impact and identify any remaining tax exemptions or refund opportunities. <\/p>\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<div class=\"wp-block-leyton-orion-block-list list-block undefined\">\n<div class=\"container\">\n<div class=\"row\">\n<div class=\"col\">\n<h2>Sources <\/h2>\n<ul>\n<li><strong><a href=\"https:\/\/washingtonstatestandard.com\/2026\/03\/31\/gov-bob-ferguson-has-a-critical-choice-to-make-on-data-centers\/#:~:text=Senate%20Bill%206231%2C%20which%20recently,modern%20and%20energy%2Defficient%20technology\">Washington State Standard &#8211; Gov. Bob Ferguson has a critical choice to make on data centers<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/app.leg.wa.gov\/billsummary?BillNumber=6231&amp;Initiative=false&amp;Year=2025&amp;utm\">Washington State Legislature &#8211; SB 6231 &#8211; 2025-26<\/a><\/strong><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Washington has enacted legislation under Washington Senate Bill 6231 that&nbsp;eliminates&nbsp;key sales and&nbsp;use&nbsp;tax exemptions previously available to data centers.&nbsp; The changes impact replacement equipment and refurbished data centers, which historically allowed ongoing exemption benefits for existing facilities.&nbsp; Removal of Replacement Equipment Exemption&nbsp; Washington no longer treats replacement server equipment as qualifying exempt equipment.&nbsp; Only original server [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3265,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[429,431],"tags":[433],"expertise":[370,372],"class_list":["post-2542","article","type-article","status-publish","format-standard","has-post-thumbnail","hentry","category-state-local-tax-salt-en","category-state-and-local-tax-salt-en","tag-tax-exemptions-en","expertise-innovation-funding-incentives","expertise-real-estate-tax-optimization"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.1 (Yoast SEO v28.1) - 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