Effort to attract data centers to Colorado with tax incentives fails

Colorado lawmakers have rejected House Bill 1030, a legislative effort aimed at providing substantial sales and use tax exemptions to data center companies for equipment, software, and environmental control systems. State Representative Alex Valdez, D-Denver, presented the bill to the House Energy and Environment committee after multiple postponements. Despite introducing amendments to strengthen environmental safeguards, the bill was ultimately voted down 11-2, effectively ending its progression in the legislative session. Rep. Valdez expressed his expectation of the outcome, stating that "nothing satisfied the ‘enviro’ coalition" and that Colorado's robust framework for data centers would now be seen as a signal to the industry that the state "remains closed." He suggested that neighboring states like Wyoming would instead reap economic benefits from data center development. The bill's failure reflects a broader national trend where elected officials are facing increasing public opposition to data center projects due to concerns over their significant demands on natural resources, rising utility costs, and limited job creation. Denver is reportedly considering a moratorium on new data center development, while Larimer County already has one in place. The state currently hosts 56 data centers, though industry experts note a lack of large-scale facilities compared to other regions. This marks the second consecutive year a similar data center incentive bill has failed in Colorado.