The state will not accept applications for data center tax incentives until further notice, Gov. Maura Healey announced Thursday as she simultaneously rolled out the guidance that she had pledged would focus on energy independence and environmental impacts.
Healey said the hold on applications for the 20-year sales and use tax exemption for qualified data centers, which she agreed to as part of a 2024 economic development law, will remain in effect “until we have strong protections in place for our residents and communities against higher gas and electric bills.” Final regulations launched the exemption last month, but Healey’s administration said it had not yet received any applications for the incentives.
“Data centers can support innovation and economic growth, but if developers want to build in Massachusetts, they need to first demonstrate that they can do so without driving up costs or harming our communities,” the governor said.
A Democrat seeking a second term this fall, Healey has both embraced the artificial intelligence industry that is driving much of the data center boom and moved to shore up state environmental protections. In a radio interview this month, she laid out her “absolutely imperative” guiding principles for data centers: “you can’t suck energy off the grid and hurt other ratepayers, and you can’t do harm to our environment, especially when it comes to water.”
The framework issued Thursday says data center projects “are expected to bring their own clean energy, avoid shifting or increasing costs to other energy consumers, protect environmental and community health, avoid placing additional environmental and social burdens on already Burdened Areas, and contribute meaningfully to the local and state economy and clean energy goals.”
The administration also announced in its new framework that it will “use this guidance to evaluate existing regulations and permitting processes to identify opportunities for alignment with the framework’s objectives, recognizing that, for some areas, additional legislative authority is required.”
Between high energy costs, state environmental regulations, a relative dearth of undeveloped space and other factors, Massachusetts has not been a major player in the national rise of data centers, or the accompanying pushback from communities where data centers have been built. State officials are also in the midst of broad policy discussions about ways to reduce overall high energy costs.
