A nationwide move towards cloud-based computing and data storage centers signals expected growth for Connecticut’s data center industry. In a recent Hartford Business Journal article, Shipman’s Lisa Zana Real Estate Partner and Chair of the Data Center Practice discussed various tax incentives and practical benefits for investors and owners who seek to fund or set up data centers within the state. Click here to read the complete article.
Effective July 1, 2021, Connecticut’s data center law (Public Act No. 21-1) outlines various tax exemptions for property owners, operators, and investors. The law specifies that qualified data center owners or operators can apply to the Department of Economic and Community Development (DECD) to enter into an agreement with the DECD to be exempted from real property taxes, sales and use taxes, and financial transactions taxes or fees on trades of stocks, bonds, derivatives, and financial products. This agreement (and the accompanying tax exemptions) will have a term of at least twenty (20) years and may be extended to thirty (30) years, depending on the size and location of the data center investment. Qualified data centers will need to make an investment of at least $50 million if the facility is located in an enterprise zone in order to qualify for the exemptions, and $200 million if the facility is not located in an enterprise zone or a federal qualified opportunity zone. Our May 2021 blog post provides more detail on the law and qualifications.
If you have any questions about Connecticut’s data center law and how you can take advantage of the tax incentives, contact any member of our Data Center Practice. You may also click here to subscribe to receive updates and communications on qualified data centers.