By Brian Eason | Colorado Sun
With the help of generous corporate tax breaks, the state of Virginia has built up a data center industry that’s the envy of some Colorado lawmakers.
The tax incentives helped bring Virginia over $9 billion in economic investments and some 75,000 jobs. In some communities, data centers make up as much as a third of the local tax base.
But in the wake of a 2024 state audit detailing the growing environmental and financial costs for Virginia residents, public officials there have growing doubts over whether those jobs were worth the price.
A bipartisan group of lawmakers wants Colorado to follow in the footsteps of states like Virginia that offer big tech companies a blanket sales tax exemption for data centers, the energy-hungry server farms that are fueling the rise of artificial intelligence.
Proponents of Senate Bill 280 say that the estimated $15 million tax break will bring good-paying jobs to the state, and strengthen Colorado’s position as a tech industry hub.
“The reason that Colorado gets so few investments in data center technology is we’re just not competitive,” said Sen. Nick Hinrichsen, a Democrat from Pueblo who is sponsoring the bill. “If we are not competitive with our peers, the big sites will not come.”
But a broad array of taxpayer watchdog groups, consumer advocates and environmentalists say the long-term costs of data centers will far outweigh their benefits if the legislature doesn’t demand more protections for ratepayers and the environment in exchange for public subsidies.