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Regbase

The Data Center Divide

Gove County

For Gove County, see Kansas’s statewide laws and regulations below. No additional county-specific measures are listed in our research.

Mixed Data Center Policies

Kansas offers qualifying data centers a 20-year sales-tax exemption, conditional on major investment, job, water, security, and power commitments. Facilities with demand of 75 MW or more face stricter utility costs and service terms, while some large sites may have limited ability to connect and export power through July 2027.

Incentives

Tax benefits
2

Proposes a sales-tax exemption for eligible data-center costs and specified equipment labor services.

Kansas SB 51 (2025)

Creates a sales-tax exemption for eligible data-center costs and specified equipment labor services, valid for 20 years after operations commence.

Kansas SB 98 (2025)

current law · Statewide
Creates a 20-year sales tax exemption for qualifying data centers that invest at least $250 million and create 20 Kansas jobs, requires security review and water and electricity commitments, and bars them from discounted economic-development electricity rates.Kansas Data Center Sales Tax Exemption Program Guidelines (2026)

What this means

The measure offers a major incentive: qualifying projects can get a 20-year sales-tax exemption, if they invest at least $250 million and create 20 Kansas jobs. That benefit comes with requirements, including a security review, water-conservation commitments, a 10-year electricity-purchase commitment, and no eligibility for discounted economic-development electric rates, so the overall effect is strongly positive but conditional.

People behind it

  • Originating chamber of Senate Bill 98.

  • Second chamber that passed the measure as amended.

  • Lead administrator of the Data Center Sales Tax Exemption Program; reviews applications, enters incentive agreements, certifies eligibility, and oversees compliance.

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  • Receives applications, approves incentive agreements, certifies qualified firms to the Secretary of Revenue, and administers statutory compliance reviews.

  • Administers the sales-tax exemption, issues exemption certificates, and conducts or coordinates audits and enforcement.

  • Issues, modifies, suspends, or terminates the sales-tax exemption based on Commerce’s certification and notices.

  • Conducts security and critical-infrastructure risk evaluations of qualified data center equipment and software.

  • Reviews and approves, conditions, or denies qualified data center projects before public financial assistance or benefits are awarded.

Restrictions & requirementsHide restrictions & requirements13

  • A qualified firm must invest at least $250 million in eligible data-center costs by the fifth year of operations and create and maintain at least 20 new jobs for Kansas residents at the data center within two calendar years after operations begin.

  • The firm must begin construction within 10 years after entering its agreement with the Secretary of Commerce, or by an earlier deadline specified in that agreement.

  • The firm must commit to purchase electricity for 10 years from the public utility certified to provide retail electric service where the data center is located; electricity costs do not count as eligible data-center costs.

  • The firm must adopt water-conservation, water-reuse, and watershed-support practices, including measures such as efficient fixtures, rainwater harvesting, water recirculation, reclaimed-water use, and beneficial reuse of discharged water.

  • A qualified data center must consist of buildings and associated equipment connected by fiber to one another and to internet points to provide redundancy and resiliency.

  • Before the state may award public financial assistance or benefits, the project must receive approval from the Fusion Center Oversight Board following a Kansas Intelligence Fusion Center review of its equipment and software for threats to critical infrastructure.

  • The Fusion Center Oversight Board may require project changes or deny the project if the data center, as configured, would pose a threat to Kansas critical infrastructure.

  • Qualified data centers are barred from receiving discounted economic-development electric rates available to other new or expanded industrial or commercial facilities.

  • Eligibility is limited to a business or affiliate registered with the Kansas Secretary of State that develops, operates, or leases a qualified data center; telecommunications carriers, local exchange carriers, electing carriers, wireless service providers, and video service providers are excluded.

  • The firm must submit an application, enter into a binding agreement with the Secretary of Commerce before receiving the sales-tax exemption, and obtain Commerce certification and a Department of Revenue project exemption certificate before qualifying purchases may receive the exemption.

  • Applicants must pay a nonrefundable $1,000 application fee and submit specified project, workforce, utility, water-conservation, ownership, equipment, and software information under the program guidelines.

  • The firm must undergo periodic compliance reviews at least every five years, maintain required investment, jobs, utility purchases, water practices, and good standing, and provide records for audits or inspections with at least 60 days' written notice.

  • If the firm breaches the agreement, Commerce must provide written notice and a 120-day cure period; an uncured breach can result in suspension, modification, termination, or repayment of all or part of the sales-tax exemption.

Benefits & exceptionsHide benefits & exceptions8

  • Provides a sales tax exemption for construction, reconstruction, enlargement, or remodeling of a qualifying Kansas data center, including purchases made by contractors for the project. sales tax exemption for construction or remodeling

  • Extends the exemption to data center equipment, software, eligible site and development costs, machinery, and labor services used to install, repair, service, alter, or maintain data center equipment. Eligible costs include land, buildings, site improvements, engineering, design, permitting, site assessments, lease payments, and equipment acquisition, but exclude electricity costs. eligible data center costs

  • Allows qualifying firms to claim the sales tax exemption for up to 20 years after the data center begins operations, provided the firm remains compliant. valid for 20 years after the date of commencement of operations

  • Permits a qualified data center to consist of multiple buildings or distributed locations connected by fiber and associated equipment, allowing a campus or distributed-center configuration to qualify. one or more buildings

  • Allows leased buildings to qualify as data centers and permits a qualified firm to be engaged in developing, operating, or leasing a qualified data center. constructed, reconstructed, enlarged, remodeled or leased

  • Gives applicants up to 10 years after the agreement with the Secretary of Commerce to begin construction, unless the agreement sets an earlier deadline. The required $250 million investment must generally be completed by the fifth year of operations, and the required 20 new Kansas jobs must be created within two calendar years after operations begin. commit to begin construction

  • Protects qualifying project information from public disclosure through July 1, 2030, subject to specified exceptions, including information required for incentive transparency reporting and legislative post-audit review. shall not be subject to disclosure

  • Creates a formal certification process: after Commerce approves the project and the required Fusion Center Oversight Board approval is obtained, Commerce certifies the firm to the Department of Revenue, which can then issue the sales tax exemption certificate. certify to the secretary of revenue

Sources

current law · State measure: Evergy Kansas Central, Evergy Kansas South, and Evergy Kansas Metro service territories
Requires new data centers seeking at least 75 megawatts of Evergy service—or existing ones expanding by that much—to sign long-term contracts and cover minimum bills and financial collateral.Kansas Corporation Commission Large Load Power Service Tariff (2025)

What this means

For data centers with new or expanded demand of 75 MW or more, the tariff creates meaningful costs: a long service commitment, minimum bills based on 80% of contract capacity, and collateral equal to two years of minimum bills (75 MW threshold and contract terms). These requirements can make projects and early exits more expensive, although the plan is designed to cover the utility’s added costs and assigns upgrades needed solely for a large customer to that customer (incremental costs and upgrades).

People behind it

  • Filed the application proposing the Large Load Power Service rate plan and associated tariffs.

  • Co-filed the application proposing the Large Load Power Service rate plan and associated tariffs.

  • Filed the application proposing the Large Load Power Service rate plan and associated tariffs.

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  • Reviewed and approved the unanimous settlement agreement and administered the regulatory approval of the rate plan and tariffs.

Restrictions & requirementsHide restrictions & requirements15

  • New facilities with a forecast peak load of 75 MW or more, and existing customers expecting to expand by 75 MW or more, must take service under the LLPS tariff unless an eligible state-program customer instead enters into a Commission-approved special contract. Service under this schedule is required.

  • LLPS customers must commit to a minimum term consisting of up to five years of optional load ramping plus 12 years of service, and the agreement automatically renews for five-year periods unless either party gives at least 36 months’ notice. Customers shall take service for a minimum term.

  • Customers must pay a minimum monthly bill based on 80% of their annual contract capacity, even if their actual electricity use is lower. Minimum Demand shall be 80% of the annual Contract Capacity.

  • Customers must provide collateral equal to two years of minimum monthly bills when executing the LLPS service agreement; the collateral is recalculated quarterly and does not earn interest while held by Evergy. provide collateral in an amount equal to two years of Minimum Monthly Bills.

  • Collateral may be reduced only if specified credit-rating and liquidity requirements are met, with discounts capped at 60%, 50%, 40%, or 25% and subject to dollar caps of $175 million, $150 million, $125 million, and $75 million, respectively. Otherwise, the customer must provide the full collateral amount.

  • The customer must be reasonably creditworthy to Evergy’s satisfaction, and Evergy may require additional credit assurances; permitted collateral forms are limited to an approved guaranty, qualifying standby letter of credit, or cash deposit.

  • Service cannot begin until Evergy has sufficient capacity to meet the customer’s contract-capacity requirement. Service to Customers under this schedule shall not commence until the Company has sufficient capacity.

  • If existing system capabilities cannot serve the load, Evergy may obtain interim capacity through market contracts, but the customer must pay the full associated costs through an additional demand charge.

  • At transmission voltage, the customer must own, lease, or financially bear responsibility for constructing and operating the distribution substation.

  • System upgrades needed solely to serve a new or expanded large-load customer are directly assigned to that customer rather than shared among existing customers. system upgrades that are necessary solely to serve the new/expanded customers will be directly assigned.

  • Customers may reduce contract capacity without a fee only after the first five years and only by the lesser of 25 MW or 10% of contract capacity; reductions of 25 MW or less require at least 24 months’ notice, and larger reductions require at least 36 months’ notice plus a capacity-reduction fee.

  • Early termination or a change to another rate schedule requires 36 months’ written notice and generally triggers an exit fee equal to the remaining minimum monthly bills; less notice adds an early-termination fee based on the shortfall in notice.

  • The tariff imposes a reactive-demand charge when maximum reactive demand exceeds 50% of monthly maximum demand: $0.99294 per excess kilovar for Kansas Central/South customers and $0.663 per excess kilovar for Kansas Metro customers.

  • For expansion projects, Evergy may require separate metering or submetering of incremental load, or determine the incremental load subject to LLPS using historical usage when separate measurement is impractical or uneconomic.

  • Failure to maintain required collateral can lead to suspension or curtailment of electric service, and Evergy may draw collateral after an uncured customer or guarantor breach or a threatened termination of a letter of credit.

Benefits & exceptionsHide benefits & exceptions9

  • New facilities with a forecast peak load of at least 75 MW, and existing customers expected to expand by at least 75 MW, are eligible or required to use the LLPS tariff, providing a defined rate path for large data-center loads. 75 megawatts (75 MW) or more

  • A qualifying customer locating in Kansas through a state economic-development program may choose either the LLPS tariff or a negotiated special contract, subject to Commission approval. This option applies to businesses in sectors including advanced manufacturing, distribution, logistics, and professional and technical services. have the option to choose

  • Customers may use an optional transitional load-ramp period of up to five years before the required 12-year service term, allowing a facility to reach its full contracted demand gradually. up to five (5) years of an optional transitional load ramp period plus twelve (12) years

  • If Evergy’s existing system cannot initially serve the customer’s load, Evergy may procure interim capacity through market contracts under a mutually agreed Interim Capacity Agreement, allowing service to begin before permanent system capacity is available. The customer must pay the full resulting costs. enter into specific market contract agreements

  • After the first five years, a customer may permanently reduce Contract Capacity by up to 25 MW or 10% of Contract Capacity, whichever is lower, without a capacity-reduction charge. At least 24 months’ notice is required for reductions of 25 MW or less; larger reductions require 36 months’ notice and a fee. Permissible Capacity Reduction

  • Customers generally must provide collateral equal to two years of Minimum Monthly Bills, but qualifying customers can receive collateral reductions: 60% for customers meeting the highest credit and liquidity requirements, 50%, 40%, or 25% for progressively lower qualifying levels. The discounts are capped at $175 million, $150 million, $125 million, and $75 million, respectively. exempt from sixty (60) percent of the Collateral Requirement

  • During the first five years after signing the LLPS Service Agreement, cash collateral of up to $40 million receives a 25% credit toward the collateral requirement; for example, $30 million in cash collateral counts as $40 million. The customer may replace cash collateral with another approved form after 90 days’ notice, but loses the 25% credit. each dollar of the required collateral amount, up to $40 million, shall be reduced by twenty-five (25) percent

  • The LLPS Service Agreement automatically renews for successive five-year periods unless either party gives at least 36 months’ written notice of nonrenewal, providing longer-term continuity for an operating data center. automatically extend for periods of five years

  • System upgrades needed solely to serve a new or expanded large-load customer are directly assigned to that customer rather than broadly allocated to existing ratepayers. directly assigned to the new/expanded customer

Sources

current law · Statewide
Creates a 20-year sales-tax exemption for qualifying data centers that invest at least $250 million and create 20 Kansas jobs, while requiring water-conservation commitments and security review and prohibiting discounted economic-development electricity rates for data centers.Kansas SB 98 (2025)

What this means

The measure offers a substantial, 20-year sales-tax exemption for qualifying data centers (the exemption lasts 20 years). But firms must meet major investment, job, electricity, water, and security-review conditions, and data centers cannot receive the specified discounted electric rates (data centers are ineligible for the discount).

People behind it

  • Administers the SB 98 data center sales tax exemption program and processes applications.

  • Receives applications, enters into incentive agreements, reviews compliance, and certifies eligibility for the exemption.

  • Administers the sales tax exemption and may revoke, suspend, or modify it upon certification or notice from the Secretary of Commerce.

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  • Issues and audits sales tax exemption benefits and may audit qualified firms for compliance.

  • Evaluates qualified data centers’ equipment and software for potential threats to Kansas critical infrastructure.

  • Reviews and approves, conditions, or denies qualified data center projects before public financial assistance or benefits are awarded.

  • Administers the electric-utility economic development rate provisions amended by SB 98 and reports related discounted-rate activity to the Legislature.

Restrictions & requirementsHide restrictions & requirements14

  • A qualified data center project must receive approval from the Fusion Center Oversight Board before Kansas may award it public financial assistance or other public benefits, including the sales tax exemption. The Kansas Intelligence Fusion Center must review the project’s equipment and software for threats to critical infrastructure, and the board may require changes or deny the project.

  • A firm must invest at least $250 million in eligible data center costs by the fifth year of operations and create and maintain at least 20 new Kansas-resident jobs within two calendar years after operations begin to qualify for the sales tax exemption.

  • An applicant must submit an application to the Secretary of Commerce and enter into a required agreement before receiving any sales tax exemption.

  • A qualified firm must commit to beginning construction within 10 years after entering into its agreement with the Secretary of Commerce, unless the agreement requires an earlier date.

  • A qualified firm must commit to purchasing electricity for 10 years from the public utility certified to provide retail electric service where the data center is located.

  • A qualified firm must adopt water-conservation and water-management practices, including water-efficient equipment and practices, rainwater treatment or harvesting, water recycling, use of reclaimed water when possible, beneficial reuse of discharged water, and support for local watershed-restoration efforts.

  • A qualified data center is barred from receiving discounted economic-development electric rates otherwise available to certain new or expanded industrial or commercial facilities.

  • Electricity costs cannot be counted toward the $250 million eligible data center investment threshold.

  • The sales tax exemption is available only to a qualified firm registered with the Kansas Secretary of State and engaged in developing, operating, or leasing a qualified data center; telecommunications carriers, local exchange carriers, electing carriers, wireless service providers, and video service providers are excluded.

  • The Secretary of Commerce may review a qualified firm every five years and must certify its continued eligibility to the Secretary of Revenue. The firm must provide information needed for the review and remain in compliance with the statute, applicable rules, and its agreement.

  • The firm’s books and records relating to eligibility and compliance must be available for inspection during business hours with at least 60 days’ prior written notice, and the Department of Revenue may audit the firm or an applicable third party.

  • If the Secretary of Commerce finds a breach of the agreement, the firm receives 120 days to cure it. If the breach is not cured, the state may require repayment of some or all of the tax exemption and may suspend, modify, or terminate the exemption.

  • The sales tax exemption lasts no more than 20 years after commencement of operations and cannot be approved unless the Secretary of Commerce certifies that all statutory, regulatory, and agreement requirements have been met.

  • Contractors using the data center project exemption must provide exemption-certificate information to suppliers, retain invoices for five years, and submit a sworn completion statement. Improper use or disposal of exempt materials, machinery, or equipment without paying the applicable tax is a misdemeanor.

Benefits & exceptionsHide benefits & exceptions8

  • Provides a state and local sales-tax exemption for up to 20 years after operations begin, covering qualified data-center construction, reconstruction, enlargement, and remodeling, as well as eligible data-center costs, equipment, and related installation and maintenance labor. The exemption may be valid for 20 years.

  • Allows contractors to use project exemption certificates to purchase construction materials, machinery, and equipment for an approved data-center project without sales tax, subject to invoice, sworn-statement, five-year recordkeeping, and audit requirements. The contractor may purchase materials, machinery and equipment for incorporation in such project.

  • Makes a broad range of data-center equipment eligible for the exemption, including servers, networking equipment, generators, cooling systems, water-conservation systems, software, cabling, and other essential operating property, while excluding administrative property. Data center equipment is defined broadly.

  • Includes numerous development and operating expenditures in eligible data-center costs, including land, buildings, site improvements, equipment acquisition and permitting, lease payments, site assessment, engineering, and design; electricity costs are excluded. Eligible data center costs include permitting and other specified costs.

  • Sets the principal qualification threshold at an investment of at least $250 million in eligible data-center costs, completed by the fifth year of operations, together with at least 20 new Kansas-resident jobs created and maintained within two calendar years after operations begin. Invest at least $250 million and create 20 new full-time jobs.

  • Permits an approved project to delay construction for up to 10 years after the agreement with the Secretary of Commerce, unless the agreement requires an earlier date. Commit to begin construction within the specified period.

  • Provides a framework for long-term electricity supply by requiring a qualified firm to commit to purchase electricity for 10 years from the public utility certified to serve the project location. A ten-year electricity purchase agreement is required.

  • Allows the Secretary of Commerce and Secretary of Revenue to adopt implementing rules and regulations, creating an administrative process for applying for, certifying, and administering the exemption. The secretary of commerce or the secretary of revenue may adopt rules and regulations for implementation.

Sources

current law · Statewide
Extends through July 1, 2027, a rule allowing utilities to deny parallel-generation service to new or expanded data centers served at 34.5 kV or higher and excluding their added demand from utility peak-demand calculations.Kansas Senate Bill 92 (2026)

What this means

This measure does not directly limit data center construction or normal operations, but it extends through July 1, 2027 a rule letting utilities decline parallel-generation service for certain new or expanded large facilities, including data centers served at 34.5 kilovolts or higher. That may modestly constrain their ability to connect generation and export excess power, but the restriction is limited and temporary.

Timing

Ends
Jul 1, 2027

The temporary exclusion allows utilities not to offer parallel generation service to certain new or expanded large-load facilities and excludes their additional demand from historic peak-demand calculations. These provisions expire on 2027-07-01; all other provisions remain.

People behind it

  • Original and current sponsor of SB 92.

  • House committee that amended SB 92.

  • House conferee appointed to the SB 92 conference committee.

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  • House conferee appointed to the SB 92 conference committee.

  • House conferee appointed to the SB 92 conference committee.

  • Senate conferee appointed to the SB 92 conference committee.

  • Senate conferee appointed to the SB 92 conference committee.

  • Senate conferee appointed to the SB 92 conference committee.

Restrictions & requirementsHide restrictions & requirements2

  • For a new or expanded data-center facility that receives electric service at 34.5 kilovolts or higher and begins service on or after July 1, 2025, the utility is not required to offer parallel-generation service. This exception expires July 1, 2027. (new or expanded facility)

  • When calculating the utility’s historic peak demand for the parallel-generation capacity limit, the utility must exclude the additional demand of a new or expanded data-center facility served at 34.5 kilovolts or higher that begins service on or after July 1, 2025. This can reduce the capacity base used to determine how much parallel-generation service the utility must provide, and the exclusion expires July 1, 2027. (additional demand of any new or expanded facility)

Benefits & exceptionsHide benefits & exceptions2

  • For a new or expanded data center facility receiving electric service at 34.5 kilovolts or higher that begins service on or after July 1, 2025, the utility is not required to provide parallel generation service. This provision expires July 1, 2027. (K.S.A. 66-1,184(i)(1) and (i)(3))

  • When calculating the utility’s historic peak demand for parallel-generation capacity limits, the utility must exclude the additional demand from a new or expanded data center facility receiving service at 34.5 kilovolts or higher that begins service on or after July 1, 2025. This provision expires July 1, 2027. (K.S.A. 66-1,184(i)(2) and (i)(3))

Sources

failed · Statewide
Would prohibit data centers with a monthly peak electricity demand of 20 megawatts or more from using cooling systems that release water vapor into the air; the bill died in committee.Kansas SB 400 (2026)

What this means

It would bar data centers with monthly peak demand of 20 megawatts or more from using open-loop cooling that releases water vapor into the air, requiring a closed-loop system instead (cooling-system requirement). That could add costs or limit cooling choices, but the bill does not ban data centers or impose other major development restrictions.

People behind it

  • Identified as the committee responsible for proposing and introducing Senate Bill 400.

Restrictions & requirementsHide restrictions & requirements3

  • A large-load data center may not operate an open-loop cooling or heat-removal system that directly exposes or discharges cooling-process water vapors to the ambient atmosphere. It must use a closed-loop or otherwise sealed system with no contact between the cooled or heated fluid and the ambient atmosphere.

  • The cooling-system restriction applies to any data center with a monthly maximum electrical demand of 20 megawatts or more, or that is reasonably expected to reach that demand.

  • The attorney general, or a city, county, or district attorney, may seek a temporary or permanent court injunction or another legal remedy to stop a person or entity from violating the cooling-system requirement.

Sources

failed · Statewide
Would have required data centers to be on land zoned for industrial or manufacturing use by July 1, 2025, to qualify for the sales tax exemption; the bill died in committee.Kansas SB 526 (2026)

What this means

If enacted, the bill would limit the sales-tax exemption to data centers on land already zoned for industrial or manufacturing use by July 1, 2025, narrowing eligible sites and potentially increasing project costs; it would not ban construction or operation elsewhere. The bill died in committee, so this is a proposed effect, not current law.

People behind it

  • Introduced the bill and is identified as its original and current sponsor.

  • Identified as the legislator who requested the bill.

  • The department designated in the bill for administration of the qualified data-center provisions.

Restrictions & requirementsHide restrictions & requirements1

  • To qualify for the sales-tax exemption, a data center must be located on land that was zoned and classified for industrial or manufacturing uses as of July 1, 2025. This requirement applies only to land that was subject to local zoning regulations, or had been zoned for particular uses, on or before that date; land not subject to such zoning is not covered by the requirement.

Benefits & exceptionsHide benefits & exceptions3

  • Maintains eligibility for a sales-tax exemption for the construction or remodeling of a qualified data center, but only when the facility is located on land that was zoned and classified for industrial or manufacturing uses on July 1, 2025. This applies only if the land was subject to local zoning regulations on or before that date. sales tax exemption for the construction or remodeling of a qualified data center

  • Defines eligible data-center costs broadly to include land, buildings, site improvements, data-center equipment, equipment acquisition and permitting, lease payments, site assessment, and engineering and design used directly and exclusively for a qualified data center. Electricity costs are excluded.

  • Includes a broad range of equipment within the data-center equipment definition, including servers, networking and security systems, backup generators, cooling and environmental-control systems, water-conservation systems, cabling and conduit, software, and other personal property essential to operations, whether or not affixed to real property.

Sources

failed · Statewide
Would have barred new data centers expected to use at least 10 megawatts of electricity in counties with a drought emergency declared within the prior three years, but the bill died in committee.Kansas SB 531 (2026)

What this means

The bill would block new data centers with expected monthly demand of at least 10 megawatts in any county that had a drought emergency declared in the previous three years, creating a significant but geographically limited barrier (large load data centers). Projects already operating or authorized before July 1, 2026, would be exempt, and the restriction would not apply statewide in all circumstances (authorized prior to July 1, 2026).

Timing

Ends
the end of the three-calendar-year period following the declaration of a drought emergency

A county board may issue a moratorium on new large load data centers during that period. The measure does not provide for an extension beyond the three-calendar-year period; existing or pre-authorized facilities are exempt.

People behind it

  • Original sponsor and proposing committee for SB 531

Restrictions & requirementsHide restrictions & requirements2

  • A new large-load data center—defined as a data center reasonably expected to have a monthly maximum electrical demand of at least 10 megawatts—may not be installed, placed, constructed, or operated in a county that has had a drought emergency declared under the Kansas Emergency Management Act during the preceding three calendar years. The county commission must deny the request and may impose a moratorium lasting until the three-year period ends. The restriction does not apply to a facility already installed, placed, constructed, or operating, or authorized before July 1, 2026, through an applicable permit or written county or city agreement.

  • Counties and cities may adopt or implement planning and land-use laws and regulations that are more restrictive than the bill, allowing additional local barriers to the siting or development of data centers.

Benefits & exceptionsHide benefits & exceptions4

  • The prohibition applies only to a “large load data center,” defined as a data center reasonably expected to have a monthly maximum electrical demand of 10 megawatts or more. Data centers below that threshold are outside this prohibition. large load data center

  • The three-year prohibition applies only in a county that has had a drought emergency declared within the preceding three calendar years. Large load data centers in other counties are not subject to this prohibition under the measure. within the preceding three calendar years

  • Large load data centers that were already installed, placed, constructed, or operated on or before July 1, 2026, are exempt from the measure. Was installed, placed, constructed or operated on or before July 1, 2026

  • A large load data center authorized before July 1, 2026, remains exempt if the authorization was provided through a building, zoning, or development permit, a conditional or special use permit, or a written agreement with the county or city. was authorized to be installed, placed, constructed or operated by a county or city prior to July 1, 2026

Sources

failed · Statewide
Creates a 20-year sales-tax exemption for qualifying data centers that invest at least $250 million and create 20 Kansas jobs, requires security review and water and electricity commitments, and prohibits discounted economic-development electricity rates for data centers.Kansas SB 51 (2025)

What this means

The measure offers a large, 20-year sales-tax exemption for qualifying data centers that invest at least $250 million and create 20 Kansas jobs (20 years after operations begin). But projects must meet water and electricity commitments and receive security review, and data centers cannot get the law’s discounted economic-development electric rates (water commitments, not eligible for the discount). Overall, the strong incentive outweighs these meaningful conditions, but it applies only to large qualifying projects.

Timing

The measure prohibits discounted economic-development electric rates for qualified data centers, with no stated expiration or extension condition for that prohibition. Separately, certain discounted-rate authority for other qualifying facilities ends on 2030-12-31, with a possible extension to 2036-12-31 if the utility applies by 2028-12-31; that sunset does not limit the data-center prohibition.

People behind it

  • Identified as the committee introducing Senate Bill 51, the predecessor proposal containing the data-center sales-tax exemption.

  • Administers the program by receiving applications, approving agreements, certifying qualified firms to the Department of Revenue, and monitoring compliance.

  • Reviews applications, enters into agreements with qualified firms, certifies eligibility, and notifies the Department of Revenue of changes to an exemption.

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  • Administers the sales-tax exemption and issues, modifies, suspends, or revokes exemption approval based on Commerce certification.

  • Approves the sales-tax exemption upon Commerce certification and may conduct or request audits of qualified firms.

  • Evaluates a qualified data center’s equipment and software for potential threats to Kansas critical infrastructure.

  • Must approve a qualified data-center project before public financial assistance or benefits, including the sales-tax exemption, may be awarded.

Restrictions & requirementsHide restrictions & requirements14

  • Eligibility requires at least $250 million in eligible data center costs, completed by the fifth year of operations.

  • The qualified firm must create and maintain at least 20 new jobs at the data center within two calendar years after operations begin; the jobs must be filled by Kansas residents whose primary work locations are in Kansas.

  • An applicant must submit an application, obtain approval from the Secretary of Commerce, and enter into a required agreement before receiving the sales tax exemption.

  • The qualified firm must commit to begin construction within 10 years after entering into the agreement, unless the agreement requires an earlier date.

  • The qualified firm must commit to purchase electricity for 10 years from the public utility certified to provide retail electric service in the data center’s territory.

  • The qualified firm must commit to water-conservation practices, including water-efficient practices, rainwater treatment or harvesting, water recirculation or recycling, use of reclaimed water when possible, and support for local watershed restoration.

  • Before the state awards public financial assistance or benefits, including the sales tax exemption, the project must receive approval from the Fusion Center Oversight Board after a Kansas Intelligence Fusion Center review of its equipment and associated software.

  • The Fusion Center Oversight Board may require project changes or deny the project if the data center, as configured, poses a threat to Kansas critical infrastructure.

  • A qualified data center is limited to one or more buildings housing networked servers in Kansas and connected to one another and internet points by fiber and associated equipment for redundancy and resiliency.

  • A qualified firm must be registered with the Kansas Secretary of State and engaged in developing, operating, or leasing a qualified data center; telecommunications carriers, local exchange carriers, electing carriers, wireless service providers, and video service providers are excluded.

  • Qualified data centers are barred from receiving discounted economic-development electric rates otherwise available under K.S.A. 66-101j for new or expanded facilities.

  • The Secretary of Commerce may review compliance every five years, and the firm must provide information and cooperate with state audits and inspections of records.

  • If the firm breaches the agreement, it receives 120 days to cure the breach; if it fails to cure, the state may require repayment of some or all exemption benefits, suspend or terminate the exemption, or modify it.

  • The sales tax exemption cannot be approved unless the Secretary of Commerce certifies that the firm satisfies the statutory requirements, applicable rules, and its agreement; the exemption may later be revoked, suspended, or modified upon the Secretary of Commerce’s request.

Benefits & exceptionsHide benefits & exceptions9

  • A qualified firm may receive a sales-tax exemption for eligible data-center costs, construction and remodeling purchases, machinery and data-center equipment, and labor to install, repair, service, alter, or maintain data-center equipment, provided the firm invests at least $250 million and creates and maintains at least 20 Kansas-resident jobs within the required timeframes. qualified firm ... shall receive a sales tax exemption

  • The exemption covers a broad range of qualifying infrastructure and operating assets, including servers, networking equipment, backup generators, cooling systems, water-conservation systems, cabling, software, and other personal property essential to operations. Eligible costs also include land, buildings, site improvements, permitting, lease payments, site assessments, engineering, and design; electricity costs are excluded. eligible data center costs

  • The sales-tax exemption lasts for 20 years after the data center begins operations. valid for 20 years after the date of commencement of operations

  • The law creates a project-exemption-certificate process allowing contractors to buy materials, machinery, and equipment for the project without sales tax, while requiring supplier invoices, a completion statement, and five-year invoice retention for audit. the contractor may purchase materials, machinery and equipment for incorporation in such project

  • A firm may commit to begin construction within 10 years after entering its agreement with the Secretary of Commerce, or by an earlier date specified in that agreement, giving qualifying projects a lengthy construction-start window. commit to begin construction of the project within 10 years

  • A qualified data center may consist of multiple buildings and may be constructed, remodeled, or leased, with interconnected fiber and related equipment; this allows a qualifying development to use distributed or leased facilities. one or more buildings ... constructed, reconstructed, enlarged, remodeled or leased

  • If the firm breaches an agreement condition, Commerce must provide written notice and allow 120 days to cure before the state may require repayment, terminate the exemption, or suspend it. allow the qualified firm 120 days to cure

  • Certain confidential, trade-secret, and other information submitted for eligibility reviews is protected from public disclosure when disclosure could disadvantage the firm or interfere with the program, although it remains available to legislative post-audit officials. confidential information, trade secret or other information

  • The exemption applies to qualified purchases made on or after July 1, 2025. On and after July 1, 2025

Sources

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