Sales and Use Tax Exemption for Data Center Equipment

This program does not apply to residential customers; it provides sales tax exemptions for data center businesses purchasing HVAC and energy storage equipment in Maryland. Homeowners should consult other residential energy incentive programs for tax benefits on home efficiency upgrades.

This incentive exempts sales tax on HVAC chillers, air conditioners, and lithium-ion energy storage systems sold to qualifying data centers in Maryland. To qualify a customer project, the data center must invest at least $2 million (Tier 1 areas) or $5 million (other areas) in eligible personal property and create at least five full-time jobs paying 150% of state minimum wage within three years; contractors should confirm client eligibility and equipment specifications with the Maryland program.

This sales and use tax exemption targets data center operators investing substantially in HVAC and energy storage equipment while meeting job creation thresholds of at least five net-new, full-time positions at 150% state minimum wage over three years. The program differentiates incentive thresholds by geographic tier ($2 million in Tier 1 areas versus $5 million elsewhere) and requires businesses to demonstrate compliance with job creation and wage requirements; administer by verifying qualified personal property purchases and employment documentation at time of application or claim.