Governor, Legislative Leaders Tout New Data Center Construction Incentives

CHICAGO—Illinois Gov. JB Pritzker joined with state legislators, business and labor leaders on Monday to promote Illinois’ new tax incentive for data center construction.

“In today’s world, data centers are as critical a part of our infrastructure as our roads, trains and schools,” said Gov. Pritzker. “With the legislation I signed into law, we are welcoming a surge of economic development, labor income, and good union jobs to Illinois – and not just here in the established market of Chicago, but across our whole state.”

Illinois and 30 other states have tax incentives specifically targeted at attracting data centers as part of expanded economic development efforts. State officials say the incentives will bolster the burgeoning data center industry in the Chicago region—the nation’s third largest data center market—and serve as a powerful tool to increase Illinois’ competitiveness and attract new businesses across the state.

“With the passage of Governor Pritzker’s $45-billion capital bill featuring tax incentives for data centers, Illinois joins IT hubs such as Atlanta, Silicon Valley and Northern Virginia as one the most tax friendly and geo-strategic destinations for IT investment,” said Clint Heiden, chief revenue officer, QTS. “QTS is proud to have worked closely with the Illinois Chamber of Commerce, state and local officials and economic advisors to pioneer the tax reform and we look forward to expanding our presence as a key player in Chicago’s data center community.”

The measure allows an exemption from sales tax for data centers who have or plan to make a $250-million investment in Illinois. If a data center is seeking an exemption for the construction or rehabilitation of its structure, the data center must require all contractors and subcontractors to comply with the responsible bidder sections of the Illinois Procurement Code. The measure also creates 20% income tax credit against wages if the investment by the data center is in an underserved area. The bill also requires an annual report to the Governor and the General Assembly on the tax credit’s outcome and effectiveness.

“Data centers are the future of the economy, and with our incentive package, Illinois will lead the Midwest in attracting these job creators,” said House Republican Leader Jim Durkin of Western Springs, IL.

“These incentives help give Illinois a competitive advantage in landing new data center projects,” adds Rep. Tom Demmer of Dixon, IL. “On top of high-speed fiber networks, competitive electricity rates, and open land for development, we now have tax incentives that will spur hundreds of millions of dollars in new investments.”