The short version
In 2020, the Utah Legislature exempted large data centers (150,000+ square feet) from paying sales tax on their equipment — servers, cooling systems, machinery. To qualify, a company doesn't have to create a single job, pay any particular wage, or invest a set amount of money. Most other states that offer this kind of break attach at least one of those strings. Utah's doesn't.
The exemption also reaches backward in time: it covers any qualifying facility built on or after July 1, 2016 — a date already in Utah law before S.B. 114, which kept it. Utah first passed the exemption in 2016; S.B. 114 rewrote it and extended it to tenants who lease space inside a qualifying data center.
The bill passed with zero recorded "no" votes in either chamber. The Legislature's own fiscal note said the cost to the state was "unknown." Six years later, Utah's State Auditor confirmed the state still has no system to calculate what the exemption has actually cost in lost tax revenue.
General Fund · Education Fund · Uniform School Fund
the city or county where the facility sits
The operative exemption is Utah Code §59-12-104(84). Here is the exemption language, verbatim from the enrolled bill:
(a) are used in the operation of the qualifying data center or the occupant's operations in the qualifying data center; and
(b) have an economic life of one or more years
Nowhere in that subsection — or in the definition of a "qualifying data center" under §59-12-102(106) — is there a jobs, wage, or investment threshold. The full definition requires only:
(a) houses a group of networked server computers... to disseminate, manage, and store data;
(b) is located in the state;
(c) is a new operation constructed on or after July 1, 2016;
(d) consists of one or more buildings that total 150,000 or more square feet;
(e)–(f) is owned or leased by the operator or a commonly-owned entity
By contrast, elsewhere in the very same enrolled bill, a different exemption — for amusement and recreation facilities under subsection (76) — does require the purchaser to show that "51% or more of the purchaser's sales revenue... is amounts paid or charged as admission or user fees," and it empowers the Tax Commission to write rules verifying that. The Legislature clearly knew how to attach a performance condition to an exemption in this bill. It chose not to for data centers.
What this exemption doesn't cover
S.B. 114 only exempts what a data center buys — equipment purchased from vendors. It says nothing about what a data center sells to its own customers, and that turns out to be a separate, murkier tax question that depends entirely on the facility's business model:
Internal use only
Colocation (leased rack space)
Cloud computing / SaaS
Pure data access/storage
Which category a given facility falls into isn't disclosed anywhere in public record for any Utah data center, including Stratos, whose developer has publicly described a leased-tenant model rather than internal-only use — a structure that points toward the taxable-lease or SaaS categories rather than the internal-use or narrow database exemptions. No Utah Tax Commission ruling or public filing classifies Stratos's own service revenue one way or the other. It's a genuinely open, untracked question, entirely separate from the equipment exemption documented throughout the rest of this case file.
S.B. 114 passed both chambers of the Utah Legislature without a single recorded "no" vote at any stage:
| Stage | Vote |
|---|---|
| Senate Revenue & Taxation Committee | 5–0–3 |
| Senate 2nd Reading | 22–0–7 |
| Senate 3rd Reading | 23–0–6 |
| House Revenue & Taxation Committee | 10–0–5 |
| House 3rd Reading | 68–0–7 |
| Senate Concurrence | 27–0–2 |
Every stage passed with zero "no" votes recorded — only yeas and absences/not-voting.
Both committee hearings are on the public record. Here is the entire substantive record of discussion on the data center provision, as captured in the official minutes:
Absent (3): Sen. Gene Davis; Sen. Daniel Hemmert, now MIDA's executive director, who was also absent for the first vote on the next bill and voted on every item after that; Sen. Evan Vickers.
No: none.
Absent (5): Rep. Jefferson Moss, Rep. Douglas Sagers, Rep. Mike Schultz (the bill's House sponsor), Rep. Norman Thurston and Speaker Brad Wilson.
No: none.
The same House committee, in the same meeting, immediately before taking up S.B. 114, held a different bill: H.B. 424, Tax Exemptions Economic Impact Amendments (Rep. Robert Spendlove). That bill would have required businesses to report the dollar value of their sales tax exemptions by category, required the Tax Commission to categorize every exemption in the code, and required annual reporting to the Revenue and Taxation Interim Committee — essentially the tracking system Utah still lacks today. Its own sponsor moved to hold it. The vote was 11–1–3.
Read the exact sequence from the House committee minutes
The Legislative Fiscal Analyst's note on S.B. 114 did not put a dollar figure on the exemption. The note's revenue lines show $0, and the text beneath them says the bill may reduce revenue by "an unknown amount":
The official Net GF/EF/USF impact on the note is recorded as $0 / $0 / $0 — not because the impact was zero, but because it was never quantified. The note also states: "No performance note required for this bill." A performance note is the Legislature's mechanism (Joint Rule JR4-2-404) for tracking whether a new program or agency delivers on its stated goals over one, two, and three years. Under Utah's Joint Rules, that mechanism is built for new programs and agencies — not for tax exemptions — so tax breaks like this one never trigger the kind of outcome tracking that spending programs do.
Six years later, the gap remains. In a July 2026 investigation, Utah's own State Auditor confirmed the state still cannot produce a cost figure for its data center tax breaks:
Which government actually loses this money?
The fiscal note doesn't treat this as one undifferentiated loss — it separates the impact into three categories, and marks all three "unknown":
That three-way split isn't a formality — it reflects how Utah's sales tax is actually structured. The 6.1% combined rate used in the calculation below is two separate pieces: a 4.85% state rate, which feeds the state's General Fund, Education Fund, and Uniform School Fund (the "GF/EF/USF" line on every Utah fiscal note); and a 1.25% local add-on that is mandatory statewide but is distributed to cities and counties, not the state. Any additional local option sales taxes a county or city has separately adopted layer on top of that, and are lost as well. So a single exempted equipment purchase is simultaneously a loss to the state's own budget and to the county or city where the facility sits — and neither side has ever been required to say by how much.
The watchdog group Good Jobs First lists Utah as one of just seven states nationally for which no cost data — not even outdated or unofficial figures — can be found at all.
What a single facility's exemption is actually worth
Because Utah doesn't track this, there's no official number for what any specific facility has saved. But the exemption applies only to equipment — servers, cooling systems, machinery — not to the building itself, which was never subject to sales tax to begin with. Using the Kem C. Gardner Policy Institute's own modeling of a hypothetical $2 billion data center (roughly $500 million in real property, $1.5 billion in equipment), here is what that $91.5 million in exempted tax actually splits into:
Most states with a comparable data center sales tax exemption attach at least a minimum jobs requirement. Utah's exemption has none.
Virginia
Texas
Mississippi
Utah
Where cost data does exist elsewhere, it shows what an unquantified exemption can grow into. Georgia's own state audit, after being revised downward, found its data center tax break cost roughly $227 million against 1,641 actual operations jobs — about $138,000 per job, using the state's own corrected figures. Indiana's cumulative subsidy commitment to a single company's data center campuses is estimated by Good Jobs First at roughly $8.2 billion over the life of the projects — the largest known data center subsidy tied to one company in the country. Utah has no equivalent audited figure to compare, because it has never required one to be produced.
S.B. 114's exemption isn't the only tax relief a large facility can collect in Utah — it's the floor underneath whatever else gets negotiated on top of it. The clearest public example is the Stratos Project, a proposed 40,000-acre data and energy campus in Box Elder County, being developed by O'Leary Digital under the Military Installation Development Authority (MIDA). Stratos far exceeds S.B. 114's 150,000-square-foot, Utah-located, post-2016 threshold, so it would qualify for the baseline sales tax exemption automatically. On top of that baseline, MIDA separately negotiated three more layers of relief specific to this one project, disclosed in its own public FAQ materials and the interlocal agreement approved by Box Elder County (Resolution 26-12, May 4, 2026):
Box Elder County's own official Stratos FAQ confirms Resolution 26-12 authorized the interlocal agreement containing these terms. The specific rebate percentages and rate structure are further detailed in a public FAQ compiled by Grow The Flow Utah, an accountability group tracking the project, drawing directly on MIDA's own disclosed materials and county meeting records.
| Layer | Where it's diverted to |
|---|---|
| S.B. 114 sales tax exemption | State (4.85% share — GF/EF/USF) + Local (1.25%+ share — host county/city) |
| 80% real property tax rebate | Local — split among county, school district, and other local entities per MIDA's project area plan (exact percentages not public) |
| 100% personal property tax rebate | Local — same as above |
| MIDA energy tax cut (6%→0.5%) | MIDA — MIDA's own fund; this tax exists only because of MIDA's involvement, so it was never the county's or state's to begin with |
MIDA is legally empowered to levy this energy tax itself, "as though the authority were a municipality," under Utah Code §63H-1-204 — it is paid directly to MIDA, monthly, by energy suppliers. MIDA's own budget documents show it keeps a fund it calls its "MIDA General Fund" ($140.9 million in total revenue across all its project areas in FY2024) — a fund entirely separate from the State of Utah's own General Fund. Cutting this tax doesn't reduce state revenue; it reduces revenue MIDA would otherwise have collected for itself.
This isn't money Box Elder County would otherwise have collected, either. Utah Code §10-1-304 grants the power to levy this specific "municipal energy sales and use tax" to a narrow, named list: municipalities (cities and towns), MIDA, and the Point of the Mountain State Land Authority. Counties are not on that list, and the same law defines "unincorporated" as land "not within a municipality" — which is what the Stratos site is. Without MIDA's project-area designation, no public record reviewed here shows Box Elder County having independent authority to levy this tax on that land at all. MIDA's involvement is what makes the tax possible on this site in the first place; cutting its rate to 0.5% reduces revenue MIDA created the opportunity to collect, not revenue diverted away from the county.
So of the four layers stacked on Stratos, only one — the S.B. 114 exemption — touches Utah's actual state General Fund, Education Fund, or Uniform School Fund at all, and only for its 4.85% state-rate share. The property tax rebates divert money that would otherwise fund the county, the school district, and other local taxing entities. The energy tax cut diverts money that would otherwise flow into MIDA's own separate fund. MIDA's project materials separately project $250 million a year in state sales tax receipts from the data centers at full buildout — a real state-level number, but a gross projection, not reconciled anywhere in public records against how much the S.B. 114 exemption already removes from it.
What Box Elder County itself actually captures
MIDA's own governing document for this project — the Stratos Project Area Plan, effective May 4, 2026 — states plainly that the revenue this project generates is meant to be split three ways: it "will be used by MIDA to support new improvements and missions on the Associated Military Land; provide the State with revenue for it to pursue its purposes statewide; and, provide significant perpetual funding to the County for providing municipal services to the Project Area, support the local school district, and enhance its local government." The county assessor, per MIDA's own April 2026 correspondence with Box Elder officials, continues to value the property and collect the tax — then distributes it according to the interlocal agreement's formula. What that formula actually is, in exact percentages by recipient, has not been made public.
Both comparisons point the same direction: whether measured on the phase already built or the full buildout the developer publicly claims, Box Elder is positioned to receive roughly a tenth of what the same investment would generate at the county's ordinary tax rate. Neither number is audited, and Utah has no requirement that either ever be checked against what the project actually generates once built.
What the county is actually guaranteed — separate from projected tax revenue
Apart from the projected tax figures above, the interlocal agreement (Resolution 26-12, May 4, 2026) does lock in a small number of concrete, negotiated items, per Box Elder County's own official press release and its County Auditor's formal fiscal impact statement:
$16.2 million upfront
A conditional fire truck
Beyond these two items, the guardrails are operational, not financial: a 55-decibel noise limit at the site boundary, dark-sky lighting compliance, a local landowner seat on the Design Review Committee, and a requirement that the developer fund and maintain the project's own public infrastructure. None of these convert into additional county revenue — they constrain how the project behaves, not what the county collects. The Auditor's same fiscal impact statement is also the most authoritative version yet of the eventual number: the $5.4M guaranteed figure "could balloon to $108 million annually once the data center reaches full capacity" — the same full-buildout projection already covered above, now confirmed as an official county estimate rather than only a developer or MIDA talking point.
Isolating just the county government's own general fund
The $900M figure above is a combined rate across every local taxing entity — it overstates what county government itself would ever see, since most of it is the school district's share. The Utah State Tax Commission's own 2025 area tax rate report for Box Elder County breaks the combined rate apart by entity. For a representative unincorporated tax area in the county, the county's own General Operations levy — the rate that actually funds Box Elder County government's general fund, separate from the school district, fire district, and other special districts — is 0.001149 (about 0.115%). The Box Elder School District's own rate in that same area is 0.006978 — roughly six times larger than the county's own share.
That's the sharpest version of the comparison: even if MIDA's structure delivered the full promised $100–108M figure, and even if every dollar of it landed specifically in county government's own general fund — which no public document confirms, since the money is described as split among the county, the school district, and local government broadly — it would still fall short of what the county's general fund alone would normally collect from this one property, before the school district, fire district, and every other local taxing entity took their own separate shares on top of that.
Compare this to a regular project: Tyson Foods, Eagle Mountain
Stratos runs through MIDA, a special state authority. Most Utah companies don't get that route — they use the state's standard economic development tool, EDTIF (Economic Development Tax Increment Financing), the same program referenced earlier in this case file. Tyson Foods' $300 million Eagle Mountain plant, which opened in 2021 and closed in August 2026, is a documented example of what that ordinary process looks like, and the contrast with Stratos is sharp:
Tyson (standard EDTIF)
Stratos (MIDA + S.B. 114)
The difference isn't just scale — Stratos is a vastly larger project than a single meatpacking plant. It's structural: Tyson's incentive was small relative to the state's overall EDTIF caseload, capped in dollar terms from the start, and tied to performance the state could verify and claw back year by year — and it clawed back, in practice, the moment Tyson underperformed. Stratos's incentives reduce or eliminate what's owed automatically, on a project many times larger, with no comparable job-performance enforcement mechanism documented in the interlocal agreement itself.
A remote site, a small workforce, and a ban on housing anyone there
Set the incentive structure aside for a moment and ask what it's actually buying. The Stratos site is 40,000 acres of unincorporated ranchland in Hansel Valley — genuinely remote, even by rural Box Elder County standards.
Box Elder County's own FAQ puts the permanent figure at 1,000–2,000 jobs. A public FAQ compiled by Grow The Flow Utah is more skeptical, stating "industry experts say those numbers are overstated" and putting construction closer to 4,000 jobs over 10–15 years rather than the 10,000 sometimes cited — a pattern consistent with the national data center jobs research covered earlier in this case file. Combined with the commute distance and the tiny population of the only town that actually neighbors the site, the practical likelihood is that a small fraction of even that modest permanent headcount is on site on any given day — consistent with the automation-driven staffing levels documented earlier for hyperscale facilities nationally.
The county's own plan documents anticipate the site eventually growing beyond just server buildings — "future phases might include some stores, restaurants, manufacturing, and commercial development," per the same official FAQ. But the interlocal agreement approved alongside that FAQ contains a direct contradiction: it "strictly prohibits any permanent residential housing" on the site, while separately capping hotel construction at a small number of rooms. Box Elder County's own FAQ confirms both restrictions in the same document that describes future retail and manufacturing plans.
That gap matters for the incentive question specifically. Much of the standard justification for large tax breaks — the case Tyson's own EDTIF terms were built around — rests on new local spending: workers who live nearby, buy homes, shop locally, and send kids to local schools, generating tax base beyond the project itself. A workforce that commutes long distances or rotates through temporary housing doesn't generate that same local multiplier. If the people who build and eventually staff Stratos never become Box Elder County residents, a meaningful part of the standard economic case for granting incentives this size — automatic, uncapped, and larger than any comparable Utah project on record — doesn't apply the way it would for a facility employing local residents in place.
None of this confirms Stratos has actually claimed the S.B. 114 exemption — Utah doesn't publish that information for any facility, which is the same tracking gap documented throughout this case file. What's confirmed is that Stratos meets S.B. 114's qualifying criteria by a wide margin, and that it separately received three additional, project-specific tax concessions on top of whatever the statewide exemption is worth to it. The state exemption with no jobs requirement isn't an isolated policy — it's the base layer a much larger, individually negotiated package gets built on.
- S.B. 114, 2020 General Session — enrolled bill, sponsors, vote historyle.utah.gov/~2020/bills/static/SB0114.html
- S.B. 114 2nd Substitute — full bill text (Utah Code §59-12-102, §59-12-104)le.utah.gov/~2020/bills/sbillint/SB0114S02.pdf
- Senate Revenue & Taxation Committee minutes, Feb. 14, 2020le.utah.gov/interim/2020/html/00001933.htm
- House Revenue & Taxation Committee minutes, Mar. 6, 2020le.utah.gov/interim/2020/html/00002393.htm
- KUTV 2News Investigates — Utah lacks system to track data center tax breakskutv.com/news/2news-investigates
- KUTV 2News Investigates — Utah lawmakers say more info is neededkutv.com/news/2news-investigates
- Good Jobs First — Even Cloudier with a Greater Loss of Spending Controlgoodjobsfirst.org
- Kem C. Gardner Policy Institute — Data Centers and Utah's Property TaxGardner Institute fact sheet, Aug. 2026
- Tax Foundation — 2026 Utah Tax Rates & Rankings (6.10% state rate incl. mandatory local add-on)taxfoundation.org/location/utah
- Georgia data center audit revision — WSB-TV / Yahoo Financefinance.yahoo.com
- Box Elder County — Stratos Project FAQs & Facts (official, confirms Resolution 26-12)boxeldercountyut.gov/661/Stratos-Page-FAQ-Page
- Grow The Flow Utah — Stratos Data Center FAQ (rebate terms, energy tax cut, compiled from MIDA's disclosed materials)growtheflowutah.org/stratos
- Fox 13 Now — Poll shows 7 of 10 Box Elder County voters oppose Stratos Project (Garbett/$900M calculation)fox13now.com
- The Stratos Project — independent public-source guide (scale, taxes, meeting citations)stratos.fiftheast.com
- Utah Code §63H-1-204 — MIDA energy tax (levied and collected by MIDA itself, not the state)law.justia.com · Utah Code 63H-1-204
- Utah Code §10-1-304 — Municipal Energy Sales and Use Tax Act (who may levy: municipality, MIDA, Point of the Mountain State Land Authority only)le.utah.gov · Utah Code 10-1-304 (amendment text)
- MIDA FY2024 Amended Budget (shows MIDA's own separate "MIDA General Fund")utah.gov/pmn · MIDA Board Meeting, June 11, 2024
- Utah State Tax Commission — Application Hosting Services private letter ruling (colocation/leased space taxability)tax.utah.gov/commission/ruling/01-030
- Utah State Tax Commission — Publication 64, Sales Tax Information for Computer Service Providerstax.utah.gov/forms-pubs/pub-64
- Stratos Project Area Plan (MIDA's governing document, effective May 4, 2026 — revenue distribution intent)Stratos Project Area Plan, May 2026 (PDF)
- ABC4 — Documents reveal why this area was chosen for Stratos (county assessor's role, MIDA April 2026 correspondence)abc4.com
- Utah GOED — Tyson Fresh Meats to Build Food Production Plant in Utah (official incentive terms: $5,258,324 cap)business.utah.gov · GOED announcement, May 2019
- Utah Money Watch — Five Years After Opening, Tyson Foods is Shutting Down Eagle Mountain Plant (25–50% credit actually collected)utahmoneywatch.com, Aug. 2026
- Utah State Tax Commission — 2025 Area Tax Rates by County (Box Elder County entity-level breakdown: county 0.001149, school district 0.006978)files.tax.utah.gov · 2025 Area Tax Rates, Box Elder County
- Box Elder News Journal — County passes 2025 budget with smaller tax increase ($76.3M total county budget)benewsjournal.com, Dec. 2024
- MEAT+POULTRY — Tyson Foods selects site for Utah case-ready plant (Eagle Mountain/Alpine School District CRA)meatpoultry.com, May 2019
- Deseret News — Utah House speaker on data center controversy (site distance from Tremonton, on-site reporting)deseret.com, May 2026
- Wikipedia / U.S. Census — Snowville, Utah population (163, 2020 census)Snowville, Utah, 2020 Census figures
- Utah News Dispatch — Photographer's report: What I saw at the Hansel Valley data center site (first-hand road conditions)utahnewsdispatch.com, June 2026
- Box Elder County — Authorizes MIDA to Initiate Stratos Project (official press release; exact fire truck / building-height provision)boxeldercountyut.gov, May 4, 2026
- Cache Valley Daily — Box Elder County Attorney rejects referendums (Auditor Larsen's official fiscal impact statement: $5.4M guaranteed, $108M at full capacity)cachevalleydaily.com, June 2026
- Box Elder County — Stratos FAQ ($16.2M earmarked for police/fire hiring)boxeldercountyut.gov/m/faq