This bill modifies existing Washington tax law by amending RCW 82.08.986 and RCW 82.08.9861 and by creating an additional section to provide sales-and-use tax exemptions under RCW 82.08.020 for sales to qualifying businesses and qualifying tenants of eligible server equipment and eligible power infrastructure installed in eligible computer data centers. The exemptions explicitly cover labor and services to install or construct the equipment and infrastructure, and require applicants to obtain a department-issued exemption certificate that is effective on the date the application is received and normally expires two years after issuance unless construction has commenced. The bill adds procedures, limits, and conditions for issuing and using certificates: caps on the number and timing of certificates (including limits and expiration dates that differ by statutory section), first-in-time application priority, transfer rules requiring department consent, and required annual tax performance reporting. It imposes employment and other substantive conditions tied to each certificate: within six years certificate holders must create specified net increases in “family wage” employment (with numerical and square-foot prorating rules that differ by section), maintain those positions while the certificate is valid, and meet wage and benefits thresholds (including employer-provided health insurance). For certificates issued on or after June 9, 2022, newly placed-in-service data centers generally must obtain specified green building or sustainability certifications within three years; failure to meet employment or green certification conditions can trigger immediate repayment of previously exempted taxes, cancellation of the certificate, and in some cases an additional 10 percent penalty, subject to exceptions or extensions for circumstances beyond the control of the qualifying business or tenant. The Department of Labor & Industries may assist in compliance determinations, repayments must be proportional to the period of noncompliance, and the department may require records to verify compliance. The bill also provides and clarifies many definitions and timing rules: qualifying and excluded entities, what counts as a computer data center (facility size thresholds, security and power features), eligible server equipment and eligible power infrastructure, refurbishment rules and limits (including annual caps for refurbishment certificates), and deadlines for replacement equipment to qualify. Different amended sections contain different sunset or cutoff dates (for example, some provisions bar new certificate issuance after July 1, 2028 or July 1, 2036 and set exemption expirations such as July 1, 2038 or July 1, 2048), and Sections 2 and 3 take effect July 1, 2026. Some portions of the provided text are incomplete or truncated: the identity of the department administering certificates is not always named in these excerpts, some definitions and the full penalty language are cut off, and the text of the new section and certain amended provisions are not fully present in the extracted facts.

If enacted, the bill extends and reshapes time-limited sales-and-use tax exemptions for server equipment and related power infrastructure installed in qualifying large computer data centers. Owners and tenants can get immediate tax relief for purchases made on or after the department’s application-received date, but the number and timing of new certificates are capped, refurbishment certificates are strictly limited, and the exemptions themselves expire on set dates. To keep the tax benefit, businesses must meet employment targets for new "family wage" positions within six years and, for certificates issued on or after June 9, 2022, must secure specified green-building certifications within three years of placing a new center in service; failure to comply can trigger immediate repayment of previously exempted taxes, cancellation of the certificate, and an extra 10 percent penalty, with the department able to prorate repayments or grant exceptions for events beyond the business’s control. The groups most affected are owners of large eligible data centers and companies that lease space in them: they will see lower upfront costs for equipment and power infrastructure if they win one of the limited certificates, but they also take on hiring, reporting, certification, and maintenance obligations over many years and face the risk of sizable retroactive tax bills and penalties if conditions aren’t met. Sellers must retain exemption certificates presented by buyers, and state agencies (the tax department and Department of Labor & Industries, among others) will have added duties to issue, monitor, verify, and approve transfers or exceptions. Some administrative details and several definitions needed to fully interpret eligibility and penalties are missing from the extracts, so exact application in specific cases is partly uncertain.