Mass. Pauses Tax Incentives for Data Center Developers

Massachusetts Governor Maura Healey's office has declared a statewide pause on accepting applications for sales tax exemptions from data center projects. This decision was announced to address growing concerns about potential negative impacts of data centers, including increased energy costs for residents and businesses, strain on local infrastructure, and potential harms to public health. Governor Healey stated that tax incentives would be halted until robust protections are firmly in place, emphasizing that developers must demonstrate their ability to operate without driving up costs or harming communities.

Alongside the pause on incentives, Healey's administration released a comprehensive framework designed for responsible data center development and operations. This framework outlines key areas of focus, including energy supply and efficiency, local air quality and public health, water use and infrastructure protection, labor practices, community benefits, economic development, and transparency.

Energy and Environmental Affairs Secretary Tepper highlighted the significant resource demands of data centers, specifically their need for substantial energy, grid infrastructure, backup power, and water. Tepper emphasized that data center developers should be capable of covering these costs and stated, "Our framework lays out how data centers should be developed – bring your own clean energy, keep our air and water clean, and foster good jobs and investment in our communities." This framework is the result of extensive discussions with community groups, energy experts, and labor organizations, aiming to establish a foundation for developers to build positive relationships with Massachusetts communities.