A bill for an act relating to investment requirements for data center businesses that claim certain sales tax exemptions and sales and use tax refunds.

HF 2688 requires data centers in Iowa that claim sales tax exemptions or refunds to invest 5% of the value of those exemptions/refunds from the previous year into qualifying businesses or innovation funds. This applies directly to data center businesses using specific tax exemptions under sections 423.3 and 423.4. If they fail to meet this investment requirement, the state cancels their tax exemption eligibility and requires them to repay all claimed exemptions/refunds as regular tax payments. The bill also updates annual reporting requirements for data centers to include details on exempt purchases and tax refunds starting in 2027.