Dearborn Heights, MI - The Michigan Senate has passed a two-bill package granting substantial tax breaks to large data centers operated by companies like Google and Microsoft. The legislation, approved late Thursday in bipartisan votes, now heads to Governor Gretchen Whitmer for her signature.
The bills would exempt massive "enterprise" data centers from sales and use taxes on equipment through at least 2050 - or 2065 for brownfield sites - and extend existing tax breaks for smaller colocation centers.
Proponents argue the incentives are critical to attracting data center investments to Michigan, while critics warn they could undermine the state's climate goals and burden utility ratepayers.
Environmental advocates are concerned that the energy-intensive facilities will exacerbate Michigan's reliance on fossil fuels, even as the state aims to achieve 100% renewable energy by 2040. Last year's clean energy package includes an "offramp" provision allowing fossil fuel plants to stay online if renewable capacity falls short, which advocates fear the data centers will trigger.
