State legislators, business leaders, labor leaders, trade groups and existing data center businesses joined forces this week to promote Illinois’ new tax incentive for data center construction.

Gov. JB Pritzker signed into law a $45 billion capital bill featuring tax incentives for data centers, according to a state of Illinois news release.

Illinois joins 30 other states with tax incentives specifically targeted at attracting data centers as part of expanded economic development efforts.

According to the news release, the Chicago region, which includes Kane County, is the nation’s third largest data center market.

State officials say data center investments will fuel new construction and create good paying jobs across the state.

A data center is a building or dedicated space within a building used to house computer systems and associated components, such as telecommunications and storage systems.

Illinois joins IT hubs such as Atlanta, Silicon Valley and Northern Virginia “as one the most tax friendly and geostrategic destinations for IT investment,” said Clint Heiden, Chief Revenue Officer, QTS, which worked closely with the Illinois Chamber of Commerce, state and local officials and economic advisors to pioneer the tax reform.

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 percent income tax credit against wages if the investment by the data center is in an underserved area. The bill requires an annual report to the governor and the General Assembly on the tax credit’s outcome and effectiveness.

“This incentive and these data centers, which we advocated for during the budget process, will help create jobs and invest in our communities,” said Senate Republican Leader Bill Brady (R-Bloomington).

“This move will help us be a leader in the fast-growing data center industry,” said Sen. Elgie Sims, Jr. (D-Chicago). “Not only are we now in a position to compete with neighboring states, but by growing Illinois’ presence in this industry we will bring revenue and jobs that are desperately needed in our state.”

“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 (R-Western Springs).

“These incentives help give Illinois a competitive advantage in landing new data center projects,” said Rep. Tom Demmer (R-Dixon). “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. I was glad to work with business and labor, and both Republicans and Democrats, to help enact this exciting new program.”

“Data centers are essential to cloud-based computing, and touch every major Illinois industry,” said Rep. Deanne Mazzochi (R-Elmhurst). “Just as Illinois benefits from being a physical transportation hub, this bill’s elimination of data center taxes and burdens will help keep Illinois an information transport hub, and ensure we can stay competitive with neighboring states for this industry’s investment, jobs and growth.”

SOURCE: state of Illinois news release