Michigan Senate Passes Bill for Data Center Tax Breaks

The bill aims to attract tech companies to establish data centers in the state

Ben Wodecki, Jr. Editor

May 15, 2024

2 Min Read
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Michigan’s state senate has approved a bill granting tax incentives to tech firms for building data centers in the state.

Michigan is home to several data center sites, including Switch’s Pyramid Campus in Grand Rapids. However, Meta and Microsoft chose Alabama and Wisconsin for their respective data center projects, taking advantage of tax incentives.

Google recently chose Fort Wayne, Indiana to build a new $2 billion data center, just an hour from Michigan’s southern border. AWS has also committed $11 billion to investing in data centers in Indiana.

Senate Bill 237 aims to attract tech companies to establish data centers in Michigan by providing tax breaks for data center equipment and machinery until 2050. The incentives extend to 2065 if the data center is located on a brownfield site or a former power plant.

“With this legislation, we’re opening Michigan’s doors to the knowledge-based economy,” said Senator Kevin Hertel, who authored the bill. “Fitting this final piece of the puzzle into place expands on our state’s many lucrative qualities, access to infrastructure, renewable energy, a skilled workforce and unlocks our ability to secure investments that will have a positive impact on communities from Metro Detroit and Kalamazoo to Grandville and Midland.”

Related:Google Invests Billions in Data Centers, AI Skills Development

To qualify for the bill’s tax breaks, a data center must make at least $250 million in capital investments and create a minimum of 30 in-state jobs that pay at least 150% of the region’s median wage.

The bill also includes provisions related to clean energy, with tech firms choosing the Great Lake State subject to strict standards around the use of renewable sources of energy in prospective data centers.

“Here in Michigan, we are cultivating the economy of the future: an economy where business and environmental interests are not diametrically opposed but work together to create communities with access to fresh air, clean water and good-paying jobs,” said Hertel. “Coupled with our Clean Energy Future package, this legislation sets Michigan apart as a national leader, proving that we can achieve ambitious clean energy goals while also building a robust economy.”

Michigan's data center incentives bill will now go to the state's House of Representatives for another round of approval before eventually being sent directly to the governor for signing into law.

About the Author(s)

Ben Wodecki

Jr. Editor

Ben Wodecki is the Jr. Editor of AI Business, covering a wide range of AI content. Ben joined the team in March 2021 as assistant editor and was promoted to Jr. Editor. He has written for The New Statesman, Intellectual Property Magazine, and The Telegraph India, among others. He holds an MSc in Digital Journalism from Middlesex University.

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