Overview
Wyoming has enacted a two-tier sales and use tax exemption for qualifying data centers, with recent reporting showing $22.6 million in annual forgone revenue. The program requires a physical Wyoming location and capital investment ranging from $5 million to $50 million depending on the equipment tier. In 2025, the state legislature began reviewing the exemption’s transparency and effectiveness, with local officials defending the program even as statewide fiscal pressures mount.
Incentives
Sales and Use Tax Exemption for Data Processing Centers
Wyoming exempts qualifying purchases and rentals of computer equipment, software, and infrastructure for data centers that meet capital investment and job creation thresholds.
- Tier I: Exempts computer equipment and software when annual qualifying purchases exceed $2 million and the center makes a minimum $5 million capital investment.
- Tier II: Exempts UPS, backup generators, HVAC, and air-quality control equipment once qualifying purchases exceed $2 million and the center makes a minimum $50 million capital investment.
- The Wyoming Business Council must certify that job creation is appropriate to the project’s scale and stage.[1][2]
- As of calendar year 2022, the exemption covered $241 million in tier I purchases and $179 million in tier II purchases, resulting in $22.6 million in unrealized sales tax at the statewide average rate of 5.37%.[1]
Managed Data Center Cost Reduction Grant
The Business Ready Communities program reimburses qualifying data center operators for electrical and broadband costs.
- Grants up to $2.25 million over three years.
- Requires a local match that varies by award size.[2]
Requirements and Conditions
Physical Presence and Capital Investment
Wyoming requires data centers to maintain an in-state footprint and make substantial capital commitments to access tax benefits.
- The center must maintain a physical location in Wyoming where qualifying equipment is operated until end of life or replacement.[1]
- $5 million minimum capital investment for tier I equipment.
- $50 million minimum capital investment for tier II power and HVAC equipment.[1]
Annual Purchase Threshold
The sales tax exemption applies only when qualifying purchases exceed $2 million in a calendar year. If the threshold is not met, the purchaser must accrue and remit the tax by the end of January following the calendar year.[1]
Job Creation Certification
The Wyoming Business Council must certify that the center has created or will create a level of jobs appropriate to the project’s size and stage.[1]
Reporting and Compliance
State agencies report annually to the Joint Revenue Interim Committee on the exemption’s effects. Recipients can be required to report exempted tax amounts and job impacts to the Department of Revenue. For calendar year 2022, the Department contacted five certified centers and received only two responses; only one company reported enough purchases to use both tiers of the exemption.[1]
What to Watch
- Legislative scrutiny: The Joint Revenue Committee pressed for more transparency and information on fiscal impacts during 2025 hearings, and the Cheyenne mayor publicly warned that even discussions of repeal could deter future projects.[3]
- Reporting compliance: Only two of five certified centers responded to the Department of Revenue’s 2022 survey, raising questions about program oversight and utilization.
- County-level fiscal impact: Local officials argue data centers still pay personal property tax despite sales tax exemptions, a factor counties weigh when evaluating the program’s net benefit.[3]
Sources
[1] Wyoming Department of Revenue, “The Effects of the Sales and Use Tax Exemption for Qualifying Data Processing Services Center’s Purchases and Rentals” (Eleventh Edition, CY 2022), November 1, 2023, https://drive.google.com/file/d/1JlTRV-hoMppdTmkdgXTbtJbeCZRFPrYw/view (accessed January 8, 2026).
[2] Wyoming Business Council, “Data Center Sales Tax Exemption,” n.d., https://www.businesswyoming.com/workforce/workforce-programs/p/item/1775/data-center-sales-tax-exemption (accessed January 8, 2026).
[3] Andrew Graham, “Cheyenne Mayor Collins fights to maintain tax exemptions for data centers,” Wyoming Tribune Eagle, August 27, 2025, https://www.wyomingnews.com/news/local_news/cheyenne-mayor-collins-fights-to-maintain-tax-exemptions-for-data-centers/article_c6fe8242-9d15-4d9b-bc5a-7f1a9cfa4c89.html (accessed January 8, 2026).