Massachusetts Governor Halts Data Center Tax Incentive Applications, Citing Energy and Environmental Concerns

Massachusetts Governor Maura Healey announced a hold on applications for the state's 20-year sales and use tax exemption for qualified data centers. The pause will remain in effect until "strong protections" are established for residents and communities against higher energy bills and environmental harm. Governor Healey emphasized that data center developers must demonstrate their ability to operate without increasing costs for other energy consumers or negatively impacting the environment, particularly regarding water usage. The new framework also requires projects to contribute to local and state clean energy goals and avoid placing additional burdens on already affected areas.

The administration plans to use this guidance to evaluate existing regulations and permitting processes, acknowledging that some areas may require additional legislative authority. Massachusetts has not been a major data center hub due to high energy costs and environmental regulations, though a lawsuit has been filed in Lowell against Markley Group LLC and the state Department of Environmental Protection, challenging the expansion of Markley’s data center in the city’s Sacred Heart neighborhood.