Illinois Senate Unanimously Approved Data Center Incentives Bill

SPRINGFIELD, IL — The Illinois Senate has unanimously approved a long-awaited bill that grants tax incentives to data center developers. SB 1591 does the following:

  • Exempts state and all locally imposed sales taxes on the tangible personal property for qualifying data centers
  • Exempts the energy excise tax on qualifying data centers
  • Adds an additional income tax credit for the construction of new data centers in under-served areas of the state.
  • Requires data centers to use project labor agreements on the initial build of the data centers as a precondition of receiving the credit.
  • Tangible personal property includes several definitions but include items such as software, cooling systems, towers, battery systems, cabling, and also building materials in the build out.
  • Requires any new and existing data center seeking a certificate of exemption must enter into a memorandum of understanding detailing the agreement and would allow the state to claw back money if the data center doesn’t live up to the memorandum of understanding.
  • Requires the state’s economic department to provide an annual report to the General Assembly

Qualifying data centers are defined as new or existing data centers that meet the following criteria:

  1. Must be located in Illinois
  2. Must entail a capital investment of $250 Million USD by the data center operator and the tenants over a 60-month period beginning Jan 1 2020
  3. Must result in the creation of at least 20 employees over a 60-month period (with compensation of those jobs at or greater than 120% of the median wage paid in the county of the data center)
  4. Must be carbon neutral or attains several green building standards.