Maine bill blocks data centers from state tax breaks

Maine lawmakers are considering a new bill that would exclude new data centers from tax breaks that encourage job creation and equipment investment. The proposal comes as communities across Maine grapple with proposals from data centers that help power artificial intelligence and other online services, but are criticized for their massive demands on energy and water. Sen. Nicole Grohoski, D-Ellsworth, told the Legislature's Taxation Committee that the data center developments should not qualify for two tax break programs enacted to boost economic development. Grohoski argued that data centers do not require a large workforce to operate, and that other states that offered financial incentives to lure data centers have reported losing money on the deals. The bill would exclude data centers from Maine's Business Equipment Tax Exemption program, which provides a 100% break on eligible property, as well as the Dirigo business incentives program that offers tax credits and job training benefits. However, Jason Shedlock, President of the Maine Building Trades union, urged lawmakers to be cautious about the bill, arguing it could discount the construction jobs created to build data centers. Shedlock noted the Legislature is already considering a temporary moratorium on new large data centers to study the issue and develop Maine-specific guidelines for developers.