Idaho: Kuna bill preventing data centers from being built in urban renewal districts passes after initial setback

In the city of Kuna, Idaho, a bill that would have kept data centers out of urban renewal districts that failed, has been brought back. The bill would have required data center projects to choose between either receiving sales tax exemption, or being in an urban renewal district. This was passed in 2020, and enabled data center developers to qualify for both sales tax exemption as well as a property tax benefit known as an urban renewal district. The intention would be that data centers would be taxed at "full face value" after construction to receive sales tax exemption, shifting the tax burden away from residential taxpayers, and preventing companies from 'double dipping.'

The bill was put forward by Democrat Representative John Gannon, while House Majority Leader Mike Moyle, R-Star, a proponent of the bill, took to the podium to argue the bill's merits, and said a vote for the bill would be a "vote for the taxpayer." However, opponents of the bill argued that the bill would effectively bring an end to Kuna's industrial park plans, because they had planned to use the tax revenue from the data center to develop further infrastructure, which, they argued, would bring more companies to the area, jobs and diversify the tax base.

The bill ended up narrowly failing, 8-7, in the House Revenue and Taxation Committee. Yet, this week, the committee moved to reconsider the bill. This is despite it not being put on the agenda. The vote came back  11-5, and passed, with many of those who had originally voted against it, changing their mind, citing 'misconceptions.'

Meta recently announced that it would be pausing its Kuna data center plans as part of its wider rescoping efforts.