Illinois Offers Tax Breaks for Companies That Build Data Centers

The photos or videos you store in “the cloud” aren’t actually up in the air. They’re in computer systems housed in hundreds of vast buildings across the country.

Illinois is now providing tax breaks for companies that build those centers in the hopes of attracting more of them.

The incentives are part of a statewide infrastructure plan state lawmakers passed in June. Companies that create at least 20 full-time data center jobs in three years and invest at least $250 million dollars can qualify.

Rep. Tom Demmer (R, Dixon) said attracting data centers will have a two-fold effect: stimulating local economies, and improving Illinois’ image with the tech industry.

“We’re giving you the tools, we’re giving you the resources, and we want to promote and expand development of future-friendly jobs all across the state," he said at a news conference in Chicago promoting the law.

There are already 80 data centers in areas across Illinois. The majority are located in Chicago.

Governor J.B. Pritzker said neighboring states like Iowa have been more competitive in attracting that kind of business.

“With everything that Illinois has to offer-a dedicated workforce, low energy rates, our location at the heart of the United States-there’s no reason that we should not only meet the national trend toward data center growth, but lead it,” he told reporters.

Supporters claim billions of dollars of tech investment was pouring into nearby states. State Senator Elgie Sims (D, Chicago) explained the new law is aimed at leveling the playing field.

"Indiana was specifically targeting the Chicagoland market," he said. "We had to do something."

The new law requires data center jobs to be union labor. Illinois is sweetening the deal by offering up to a 20 percent tax break for companies that build data centers in areas with high unemployment or where business growth has been slow or stagnant.