Data center (King, Pierce, Snohomish): eligible power infrastructure

The owner of an eligible data center in a county with more than 800,000 people (DOR lists King, Pierce and Snohomish), and its qualifying tenants, can buy eligible power infrastructure free of Washington sales and use tax, including labor, material, equipment and services to build, install, repair, alter or improve it. DOR issues a limited number of certificates and none on or after July 1, 2028. The seller keeps a copy of the DOR certificate.

Who qualifies

• A qualifying business (a for-profit owner of the eligible data center) located in a county with a population over 800,000 under the April 1, 2021 OFM estimates. DOR names King, Pierce and Snohomish counties.
• The owner must show at least 1.5 megawatts of available power when it applies, with requests for proposals, pricing and marketing materials as DOR requires.
• A qualifying tenant must contract for at least 150 kilowatts of electrical capacity for server and computer equipment. Tenants of rural data centers must reapply to expand into an urban one.
• An eligible computer data center has at least 20,000 square feet for working servers in a facility of at least 100,000 square feet; stand-alone, prefabricated or modular units and shipping containers do not qualify; data centers refurbished on or after July 1, 2026 do not qualify.
• DOR may approve six owner applications in the first calendar year and six in each of years three through six, first come first served. DOR's table shows 6 for 2022, 0 for 2023 and 6 for each of 2024 through 2027.

What qualifies

• Eligible power infrastructure: fixtures and equipment owned by the qualifying business or tenant and necessary to transform, distribute or manage the electricity required to operate eligible server equipment: generators, wiring, cogeneration equipment, electrical switches, batteries, and distribution, testing and monitoring equipment.
• Labor, material, equipment and services to construct, install, repair, alter or improve that infrastructure. The urban statute adds "material, equipment" to this list; the rural statute does not.
• Use tax is exempt on the same items (RCW 82.12.9861(1)) if first used before July 1, 2038.

Not covered

• Substations.
• Power equipment for data centers in other counties (see the rural data center guide).
• Purchases before the certificate's issue date (no refunds).
• Data centers refurbished on or after July 1, 2026.

What the buyer gives

A copy of the Certificate for Sales Tax Exemption for Purchases by Data Centers issued by DOR. The owner applies on REV 40 2448 (building permit, site plan, confidential tax information authorization, available power documentation, proof of ownership); a tenant applies on REV 40 2451 (owner's certificate, contracted electrical capacity, lease). Both are sent through My DOR under the Data Centers topic, before purchasing. DOR issues the certificate, and the buyer gives sellers a copy.

What the seller keeps

RCW 82.08.9861(2)(b): the buyer "must present the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files." DOR's urban data center page: present the certificate to the seller, "who must keep a copy for their files." Only purchases on or after the certificate's issue date qualify ((2)(d)); a certificate expires two years after issue unless construction has begun ((2)(e)). RCW 82.32.070(1) requires five years of records, and RCW 82.08.050(4) requires proper records of exempt sales.

Common mistakes

• Assuming any Seattle-area server room qualifies. The facility must be at least 100,000 square feet with 20,000 square feet of server space, backup power, fire suppression and enhanced security, and the owner must hold one of the few certificates DOR issues.
• Exempting gear for a modular or container unit. The urban statute says these are not eligible computer data centers.
• Exempting a substation.
• Missing the claim year. RCW 82.08.9861(6): the exemption must be claimed in the tax year the tax would have been due unless an extension is filed.

Common questions

Is there a sales tax exemption for data centers in King County?

Yes, for owners and tenants that hold a DOR certificate under RCW 82.08.9861. DOR lists King, Pierce and Snohomish as the eligible counties, and no new certificates may be issued on or after July 1, 2028.

Are materials for building out data center electrical systems exempt in an urban county?

Yes. RCW 82.08.9861(1)(b) covers labor, material, equipment and services to construct, install, repair, alter or improve eligible power infrastructure.

What does a tenant need to qualify?

A lease in an eligible urban data center that holds a certificate, at least 150 kilowatts of contracted electrical capacity, and its own DOR certificate from application REV 40 2451.

What does the seller keep?

A copy of the DOR-issued certificate (RCW 82.08.9861(2)(b)).

Sources

• RCW 82.08.9861 (1)(b)-(d), (2)(a)-(f), (6), (9)(d), (f), (g), (i), (j)
• RCW 82.12.9861 (1)-(5) use tax
• DOR Tax incentive programs Data Centers: Urban data centers (limit on certificates, application process, approval and reporting)
• DOR form REV 40 2448 (6/25/26), Owner Application for Sales Tax Exemption for Purchases by Data Centers - Urban; and REV 40 2451 (12/9/25), Tenant Application - Urban Sections 1-6 (tenant form: https://dor.wa.gov/sites/default/files/2022-06/40%202451.pdf)
• RCW 82.08.050 (4), (7)(a)-(c)
• RCW 82.32.070 (1) five-year record retention