New York Senate Bill S09288

New York 2025-2026 Regular Session

• Introduced: 2/25/26
• Refer: 2/25/26

Caption

Repeals provisions relating to sale and use taxes with respect to data centers to include both personal property purchased by internet data centers and services performed on said personal property purchased by data centers.

Summary

This bill would repeal two existing sales and use tax exemptions in the Tax Law that apply to internet data centers. Specifically, it removes the exemption for tangible personal property purchased by internet data centers and the related exemption for services performed on that property. The bill is brief and would take effect immediately upon enactment. In practical terms, the measure would eliminate special tax treatment for qualifying data center purchases and maintenance-related services, making those transactions subject to the ordinary state sales and use tax rules unless another exemption applies. The bill is framed as a repeal of targeted provisions rather than a broader rewrite of the tax code, and it would directly affect data center operators, vendors, and service providers that currently rely on those exemptions.

Impact

The bill would amend New York Tax Law section 1115 by repealing paragraph 37 of subdivision (a) and subdivision (y), thereby removing statutory exemptions for tangible personal property and certain services used by internet data centers. This would likely increase taxable transactions for data center construction, equipment, and maintenance-related services, potentially raising costs for operators and suppliers. It would also narrow the scope of existing tax incentives in state law that were designed to support data center investment.

Sentiment

No committee transcript or vote record is provided, so there is no recorded debate or roll-call sentiment to assess. Based on the bill text and caption, the measure appears to be a targeted tax policy change focused on ending a specific industry exemption, which suggests a fiscal or equity-driven rationale rather than a broadly controversial policy overhaul. However, without discussion or votes, the level of support or opposition cannot be determined from the available record.

Contention

The likely point of contention is whether New York should continue offering sales tax exemptions to internet data centers as an economic development incentive. Supporters of repeal would likely argue that the exemptions narrow the tax base and provide preferential treatment to a specific industry, while opponents would likely contend that the exemptions help attract and retain data center investment, jobs, and infrastructure spending. The affected parties would be data center operators, technology companies, contractors, and service vendors that currently benefit from the exemptions.