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FL — State Policy Updated January 2026

Florida

Statewide incentives and constraints, plus permitting requirements and recent policy changes.

Sales and Use Tax Exemption for Data Center Property Local Economic Development Ad Valorem Tax Exemption 100 MW critical IT load threshold $150M investment requirement Five-year compliance reviews Water Constraints

Overview

Florida targets hyperscale data centers with one of the nation’s highest investment thresholds: 100 MW of critical IT load and $150 million in capital spending within five years. Projects that clear this bar qualify for a sales tax exemption on equipment and electricity, administered by the Department of Revenue with periodic compliance audits. Counties and cities may also grant local property tax exemptions lasting up to 20 years after a referendum and ordinance.

Incentives

Sales and Use Tax Exemption for Data Center Property

Florida exempts qualifying data center equipment and electricity from state sales and use tax under Fla. Stat. § 212.08(5)(r).[1]

  • 100 MW minimum critical IT load per facility
  • $150 million cumulative capital investment required within five years of construction start
  • 1 MW minimum per owner or tenant (multi-tenant facilities)
  • Exemption covers hardware, software, and electricity used exclusively at the data center
  • Administered via temporary and permanent tax exemption certificates issued by the Department of Revenue
  • Five-year compliance reviews ensure thresholds are maintained; failure triggers tax recapture
  • No new temporary certificates issued after June 30, 2037

Local Economic Development Ad Valorem Tax Exemption

Counties and municipalities may grant property tax exemptions to new or expanding businesses under Fla. Stat. § 196.1995, following a local referendum and ordinance.[2]

  • Exemption covers up to 100% of assessed value of improvements and eligible tangible personal property
  • Data center equipment explicitly included in the statute’s definition of eligible property
  • Exemption term for data centers can extend up to 20 years (longer than the 10-year general limit)
  • Each jurisdiction sets its own qualifying criteria and application process

Repeal of Commercial Rent Tax

Florida’s 2025 tax package eliminated the commercial rent tax (business rent tax) effective October 1, 2025, reducing costs for data centers leasing space rather than owning real property.[3]

Requirements and Conditions

Investment and Performance Thresholds

Florida’s sales tax exemption is available only to very large projects. The statute requires facilities to meet 100 MW critical IT load and $150 million cumulative investment within five years of construction start.[1] Missing either threshold results in exemption revocation and tax recapture.

Certification and Audit Requirements

The Department of Revenue requires applicants to submit engineer certifications (confirming IT load) and CPA certifications (confirming capital investment) at application and renewal.[1] The Department conducts compliance reviews every five years to verify continued eligibility.

Administrative Rule Mismatch

Rule 12A-1.108, the administrative rule implementing the sales tax exemption, still references an outdated 15 MW threshold and a June 30, 2027 application deadline.[4] The statute now specifies 100 MW and 2037. Applicants should rely on the current statute (as amended in 2025) while awaiting updated rulemaking from the Department.

Water and Environmental Rules

Environmental Resource Permits (ERP)

Florida’s water management districts issue ERPs for activities that alter surface water flows, including stormwater runoff from construction and dredge/fill operations in wetlands.[5] Data center sites that disturb wetlands or alter drainage systems typically require ERP approval before construction.

Water Use Permits

Water management districts require water use permits for specified withdrawals of ground or surface water.[6] Data centers with significant cooling water demand (evaporative cooling systems, for example) must apply for withdrawal permits and demonstrate reasonable-beneficial use.

What to Watch

  • Updated administrative rule: The Department of Revenue has not yet aligned Rule 12A-1.108 with the 2025 statutory amendments raising the threshold to 100 MW and extending the deadline to 2037. Watch for proposed rulemaking or interim guidance.
  • County-level incentive ordinances: Major Florida markets (Miami-Dade, Orange, Hillsborough) may adopt or update local ad valorem exemption ordinances for data centers. Track local economic development board agendas for referendum proposals.

Sources

[1] Florida Legislature, “Florida Statutes 2025: § 212.08 Sales, rental, use, consumption, distribution, and storage tax; specified exemptions (data center property),” https://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0212/Sections/0212.08.html (accessed January 7, 2026).

[2] Florida Legislature, “Florida Statutes 2025: § 196.1995 Economic development ad valorem tax exemption,” https://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0100-0199/0196/Sections/0196.1995.html (accessed January 7, 2026).

[3] Florida Senate, “2025 Bill Summaries: Tax Relief and Changes to Tax Policy (Bill Summary 7031),” October 1, 2025, https://www.flsenate.gov/Committees/billsummaries/2025/html/7031 (accessed January 7, 2026).

[4] Florida Department of Revenue, “Rule 12A-1.108 Exemption for Data Center Property (FAC),” effective June 14, 2022, https://floridarevenue.com/rules/pdf/12a-1108.pdf (accessed January 7, 2026).

[5] Florida Department of Environmental Protection, “Environmental Resource Permitting,” https://floridadep.gov/water/submerged-lands-environmental-resources-coordination/content/environmental-resource-permitting (accessed January 7, 2026).

[6] Southwest Florida Water Management District, “Water Use Permit,” https://www.swfwmd.state.fl.us/business/epermitting/water-use-permit (accessed January 7, 2026).