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UT — State Policy Updated January 2026

Utah

Statewide incentives and constraints, plus county-level restrictions and active policy discussions.

Sales and Use Tax Exemption Minimum 150,000 sq ft facility requirement Conditional use permits for data centers with on-site generation

Overview

Utah offers a sales and use tax exemption for equipment purchased by large new data centers, but sets strict size and construction date thresholds that exclude smaller or retrofitted facilities. At the county level, Millard County — home to several planned data center campuses near Delta — requires conditional use permits for projects that include on-site electrical generation.

Incentives

Sales and Use Tax Exemption

Utah exempts sales and use tax on purchases or leases of machinery, equipment, and operating parts used by a qualifying data center or its tenants, provided the items have an economic life of one year or more.[1]

To qualify, the facility must meet all of these conditions:[2]

  • New construction on or after July 1, 2016
  • Minimum 150,000 square feet across one or more buildings
  • Located in Utah
  • Owned or leased by the operator or an affiliate under common ownership

This threshold excludes smaller facilities, pre-2016 operations, and retrofits from the exemption.

Requirements and Conditions

Facility Size and Age

Utah’s tax exemption is available only to new, large-scale data centers. Facilities built before mid-2016 or smaller than 150,000 square feet do not qualify for the sales and use tax benefit.[2]

Local Zoning

Millard County Conditional Use Permits

Millard County requires conditional use permits for data centers paired with electrical generating facilities. These projects must undergo public hearings and Planning Commission review before approval.[3][4]

Recent examples include:

  • June 2025: Conditional use application for a data center and electrical generating facility near Delta by Fibernet MercuryDelta (application #Z-2025-035)[3]
  • September 2025: Conditional use application for a similar project near Delta by Joule Capital Partners (application #Z-2025-048)[4]

This county-level approval process adds a public review step for large data center campuses that generate their own power.

What to Watch

  • Millard County final decisions: The outcomes and conditions attached to the 2025 conditional use permits for data center projects near Delta have not been published in commission minutes.
  • Other counties: It is unclear whether Utah County, Salt Lake County, or Tooele County have adopted data center-specific zoning rules or water-use limits similar to other Western states.

Sources

[1] Utah State Legislature, “Utah Code Title 59, Chapter 12, §59-12-104 (Exemptions),” Utah Code (Sales and Use Tax Act), PDF, https://le.utah.gov/xcode/Title59/Chapter12/C59-12_1800010118000101.pdf (accessed January 8, 2026).

[2] Utah State Legislature, “Utah Code Title 59, Chapter 12, §59-12-102 (Definitions),” Utah Code (Sales and Use Tax Act), PDF, https://le.utah.gov/xcode/Title59/Chapter12/C59-12_1800010118000101.pdf (accessed January 8, 2026).

[3] Millard County Planning Commission, “Agenda,” June 25, 2025 (Conditional Use Permit #Z-2025-035 for Data Center and Electrical Generating Facility near Delta), https://millardcounty.gov/wp-content/uploads/2025/06/06252025-PC-Agenda.pdf (accessed January 8, 2026).

[4] Millard County Planning Commission, “Agenda,” September 3, 2025 (Conditional Use Permit #Z-2025-048 for Data Center and Electrical Generating Facility near Delta), https://millardcounty.gov/wp-content/uploads/2025/08/09032025-PC-Agenda.pdf (accessed January 8, 2026).