Snyder signs legislation modernizing Michigan’s tax code structure

Michigan Governor Rick Snyder signed legislation last week to modernize the structure of the state’s tax code as a means of ensuring that the treatment of data center inputs is more closely aligned with the treatment of manufacturing inputs and tax laws in other states.

“Michigan has a long tradition of innovation and talent, and is quickly becoming known as an ideal place for high tech jobs and growth of the emerging technology industry,” Snyder said. “It’s imperative that our tax policies continually develop and evolve to meet the needs of the jobs of tomorrow. The world constantly changes in how we make things, and we need to adapt and ensure we remain a state that continually draws on innovative commerce and new opportunities for Michiganders.”

Under the legislation, sponsored by state Sens. Tonya Schuitmaker and Peter MacGregor, exemptions from sales and uses taxes would be made for items in a qualified data center, including servers, routers, computers, cabling and wiring used in operating, managing or maintaining the business.

The legislation was approved with bipartisan support in both chambers.

Michigan has approximately 40 data centers that would become eligible for the exemptions. Some degree of tax exemptions on data center equipment are provided by at least 16 other states. By aligning Michigan’s tax policies with those of other states, Michigan will be put in a better position to attract more and better jobs, as well as additional investment.