Two PA Republicans want to ditch state’s data center tax break, give local government option to create moratoriums on permiting
Two Pennsylvania legislators have introduced a package of bills aimed at repealing a state tax break for data centers and empowering municipalities to enact 18-month moratoriums on data center applications. This legislative push seeks to address the rapid proliferation of data centers and allow local governments to revise zoning ordinances to mitigate environmental and community impacts.
Pennsylvania Senator Jarrett Coleman and Representative Jamie Walsh have introduced a package of bills in the state Senate and House of Representatives. The legislation aims to repeal a state tax incentive for data centers and grant local governments the authority to impose temporary moratoriums on new data center development.
Senate Bill 1344 and House Bill 2532 specifically target the state's Computer Data Center Equipment Exemption program, which currently exempts data center equipment from sales and use tax, encouraging their establishment in Pennsylvania. The proposed repeal would direct the recovered revenue towards the Motor License Fund to reduce the Oil Company Franchise Tax. Concurrently, Senate Bill 1345 and House Bill 2533 would allow municipalities to implement 18-month moratoriums on both unapproved and new data center applications. This pause would provide local authorities time to revise zoning ordinances and establish policies to address critical concerns such as power supply, water consumption, noise, and setbacks.
Senator Coleman emphasized the need for a more thoughtful approach to data center development, stating that Pennsylvanians likely do not wish to subsidize the industry with tax incentives. Representative Walsh underscored the legislators' obligation under the state's Constitution to protect the environment and public resources, citing Article 1, Section 27. The legislators believe these bills will help local governments manage the influx of interest from data center developers and mitigate potential environmental and community impacts.