A bill that would provide tax benefits for data centers has passed the Connecticut House of Representatives.

House Bill 6514, An Act Concerning Incentives for Qualified Data Centers To Locate in the State, would enable the state’s Department of Economic and Community Development (DECD) to enter into tax incentive agreements – including sales tax and property tax exemptions – with ‘qualified’ data centers.

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Connecticut seeks data centers

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The House voted 133-13 in favor of the bill on 24 February, which next must be approved by the State Senate.

“Seeing the Connecticut House of Representatives approve this measure in a bipartisan way is exactly what our residents want to see when it comes to our commitment to economic growth and continuing our Connecticut comeback,” Governor Ned Lamont said. “Data centers are the backbone of the digital age, and with this growing need we are witnessing a significant period of national growth to build these infrastructures and create the corresponding jobs that support their operations. Connecticut needs to get in the game and bring this industry to our state. This is a once-in-a-generation opportunity to show the technology industry that Connecticut supports this sector and we welcome their development in our state.”

Data centers looking to qualify for exemption would need to make an investment of at least $50 million if the facility is located in an enterprise zone, and $200 million if the facility is not located in an enterprise zone or a federal qualified opportunity zone.

The bill would provide sales and use tax as well as property exemptions, as well as an exemption for financial transactions taxes that the state may impose in the future. The exemptions would last for 20- or 30-year terms, depending on the size and location of the data center investment.

The bill was introduced by Representative Matthew Ritter, a Democrat and Speaker of the Connecticut House of Representatives, alongside Democrat Senators Martin Looney and Bob Duff as well as Democrat Representative Jason Rojas.

The bill has support from both sides, including Republican Representative Holly Cheeseman, who said data centers can “directly create upwards of a thousand jobs during construction and provide fifty to seventy-five long-term high-paying information technology jobs. Once built they provide critical infrastructure for many secondary businesses.”

Meanwhile in Wyoming, a bill – HB0088 Data center tax exemption-repeal – that aims to repeal sales and use tax exemptions for purchases made by data processing services centers has been defeated. The bill would have generated roughly $40.5 million in state and local tax revenues over the next three years, largely from the data centers based in Cheyenne, but the Wyoming Legislature’s House Revenue Committee voted down the bill 6-3.