Massachusetts pauses tax breaks for data centers and addresses energy, water and noise concerns
Massachusetts Gov. Maura Healey announced a pause on tax breaks for data centers and released a framework to address their impact on communities. The new guidelines call for data center operators to use 100% clean energy and minimize water usage and noise pollution. This comes after the state passed a 20-year tax exemption for qualified data centers in 2024.
Massachusetts Governor Maura Healey announced a halt to tax incentives for data centers in the state, effective immediately. This decision comes as her administration released a new framework aimed at mitigating the impact of data centers on local communities.
Governor Healey stated that tax breaks will be paused until robust protections are in place to shield residents from higher utility bills and other community harms. She emphasized that while data centers can foster innovation, developers must demonstrate their ability to operate without increasing costs or negatively affecting communities. The move follows the 2024 passage of the Qualified Data Center Sales and Use Tax Exemption, which offered a 20-year tax exemption for facilities meeting specific job creation criteria.
The new guidelines issued by Healey's administration mandate that data center operators adopt a "bring your own clean energy" approach to meet 100% of their demand. They are also required to minimize or mitigate air and noise pollution and ensure that their operations do not lead to water scarcity or additional infrastructure costs for communities.
The announcement coincides with a CBS News poll indicating growing skepticism among Americans regarding data center development in their areas. The report highlighted the Markley data center in Lowell, Massachusetts, as an example, noting its significant water consumption (60,000 to 120,000 gallons daily) and local complaints about constant noise.