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SB 98 Data Center Sales Tax Exemption

Kansas Senate Bill 98 (SB98), enacted in 2025, establishes a 20-year state and local tax exemption designed to attract large-scale, permanent data center developments to the State of Kansas. The program incentivizes capital investment, high-wage job creation, and long-term utility partnerships while requiring comprehensive cybersecurity and critical-infrastructure risk review through the Kansas Intelligence Fusion Center (KIFC).

Who Can Qualify

To qualify for the SB98 Data Center Sales Tax Exemption Program, a company must demonstrate a commitment to substantial investment, responsible operations, and long-term presence in Kansas. These requirements ensure that participating projects meet the scale, security profile, and economic impact intended by the Kansas Legislature.

General Eligibility Requirements

Qualified companies must meet program requirements, including:

Invest at least $250 million in eligible data center costs and complete this investment within five (5) years after the commencement of operations
Creating twenty (20) new full-time jobs with Kansas residents within 2 years of commencing operations.
Must enter into a ten-year (10) electricity purchase agreement with the utility certified to provide retail electric service at the project location
Must adopt a comprehensive water plan that reflects responsible stewardship and long-term operational sustainability.
Every applicant must undergo a comprehensive review by the Kansas Intelligence Fusion Center (KIFC), with final approval from the Fusion Center Oversight Board. This review evaluates the project’s equipment, software, ownership structure, and operational purpose to ensure that it poses no undue risk to Kansas’ critical infrastructure.

Program Guidelines

Application Fees

Applications require a non-refundable $1,000 fee for each applicant entity to complete the application.

Pay Fee

Where to start

Applications are accepted year-round. If you have any questions, contact Richard Martinez.

Apply Here

CONTACT

Richard Martinez, HPIP Program Manager

(785) 207-1660

[email protected]

Additional Resources

Application Steps

Participation begins when a firm submits a complete SB98 application to the Kansas Department of Commerce.

Completed SB98 Data Center Application
Proof of registration and good standing with the Kansas Secretary of State
Capital investment plan and timeline
Job creation schedule and workforce plan
Request the Sales Tax Exemption Form PR70-b from Kansas Department of Revenue
Agree to the 10 year electricity purchase plan requirement
Agree to utilize a water conservation plan
Submission of all equipment, software inventories, and corporate governance disclosures to KIFC
Non-refundable $1,000 application fee

After the Fusion Center Oversight Board issues its approval and Commerce completes program eligibility review, Commerce will prepare an Incentive Agreement. This legally binding agreement establishes all obligations for the 20-year exemption period and outlines compliance expectations. Once the Incentive Agreement is fully executed, Commerce will issue a Certification Letter that certifies the project to the Kansas Department of Revenue, enabling the issuance of the sales tax exemption certificate by Kansas Department of Revenue.

Senate Bill 98

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