Connecticut

Qualified data center tax exemptions (section 32-286)

Incentive or explicitly supportive policy

In effect This instrument is recorded as currently in effect as of the dataset date.

Scope

Connecticut General Statutes section 32-286 lets a person who expects to own, operate or be a colocation tenant in a qualified data center apply to the Commissioner of Economic and Community Development for an agreement exempting that center from the taxes imposed under chapters 203 and 219. A qualified data center is a facility developed, acquired, constructed, rehabilitated, renovated, repaired or operated to house networked computer servers in one location or contiguous locations to centralize the storage, management and dissemination of data. The commissioner may approve the agreement only if the facility will be used as a qualified data center and will make, by the fifth anniversary of the agreement, a qualified investment of at least fifty million dollars in an enterprise zone or a federal opportunity zone, or two hundred million dollars elsewhere. The agreement runs twenty years, or thirty years if the investment reaches two hundred million dollars in such a zone or four hundred million dollars elsewhere. Chapter 219 relief is a Revenue Services certificate covering qualified data center equipment, specified services and all electricity used by the center. Chapter 203 relief covers real property, buildings or structures at the center and enterprise information technology equipment. No developer or owner may begin construction, rehabilitation, renovation or repair unless the owner has a negotiated host-municipality fee agreement, and one is required with each municipality when a facility crosses a boundary. If the municipality finds the fee agreement unmet and the center does not cure that within one hundred eighty days, the agreement terminates and the exempted chapter 203 tax, penalty and interest become collectible as municipal taxes. If the commissioner terminates the state agreement, chapter 219 tax, penalty and interest may be collected by the Commissioner of Revenue Services, with a lien and a foreclosure action by the Attorney General. An approved agreement also includes an annual fee set by the commissioner, not to exceed fifty thousand dollars, payable until the qualified investment is reached or the qualifying period ends, whichever is sooner. A qualified data center that enters into an agreement under this section and makes the higher investment, and its operator, affiliate, and colocation tenant, is exempt for thirty years after the commissioner determines that construction, rehabilitation, renovation or repair is complete from any state financial-transactions tax or fee on trades of stocks, bonds, derivatives and other financial products. The exemption is not automatic and does not apply to every data center in Connecticut.

Geographic scope
Connecticut
Jurisdiction
State
Authority type
Legislature
Issuing authority
Connecticut General Assembly

Dates

Adopted
4 March 2021
Effective
1 July 2021
Scheduled expiration
See completion condition
Ended
Not recorded as ended
Completion condition
The section states no expiration. An approved agreement runs twenty years, or thirty years at the higher investment, from that agreement's own effective date.
Source document
The source page states no document date
Last checked
24 September 2026 (earlier than tracker date 5 October 2026; not an automatic status change)

Summary

Section 32-286, effective July 1, 2021, authorizes sales-and-use and property-tax exemptions for a qualified data center only after the Commissioner of Economic and Community Development approves an agreement and the center meets the investment test and has a host-municipality fee agreement. A center that has an approved agreement and makes the higher investment, and its operator, affiliate, and colocation tenant, is also exempt from a state financial-transactions tax or fee. It does not exempt every Connecticut data center. Public Act 21-1 was approved March 4, 2021. Public Act 26-122, approved June 2, 2026, amended the administration of subsection (c), including what the annual fee of up to fifty thousand dollars pays for, without changing the thresholds, agreement lengths, exemption categories, or host-municipality requirement.

What this does not establish

  • An exemption requires an application and a commissioner-approved agreement. The statute does not exempt every data center, owner, operator or colocation tenant in Connecticut.
  • The minimum qualified investment is fifty million dollars in an enterprise zone or federal opportunity zone and two hundred million dollars elsewhere, due by the fifth anniversary of the agreement. A thirty-year term requires two hundred million dollars in such a zone or four hundred million dollars elsewhere.
  • Construction, rehabilitation, renovation or repair may not begin until the owner has a negotiated host-municipality fee agreement. The opened statute does not say that any facility has one.
  • The compilation opened on September 24, 2026 still prints only the history line "P.A. 21-1 effective July 1, 2021" and still establishes an Office of Data Infrastructure Administration and Security. Public Act 26-122, section 7, approved June 2, 2026 and effective from passage, deletes that office sentence and says the department serves as liaison. It keeps the annual fee cap of fifty thousand dollars and changes the fee's purpose from that office to the department's processing of applications. It restates the same investment thresholds, agreement lengths, and financial-transactions exemption for a center that has an agreement and makes the higher investment. Subsections (a), (b), (d), (e) and (f) were not replaced by that act.
  • The agency program page still describes the exemptions and links to Public Act 21-1. It is a supporting description, not the statute, and its web address still uses the former office name.
  • The General Assembly's bill-status pages are disallowed to automated collection, so this record does not store a terminal date for an unenacted bill and does not add a separate failed-bill record. Office of Legislative Research report 2026-R-0137, dated September 14, 2026, still describes section 32-286 as allowing agreements. House Bill 5469 of 2026 is described in that report as a bill that would have established a framework for regulating the electric supply of certain large electric load customers. The report says the Energy and Technology Committee favorably reported it to the House, which took no action. It is not recorded as law.

Unresolved questions

  • Whether any person has an approved agreement, and whether any host municipality has enforced a fee agreement, was not established.
  • Whether the online compilation will be revised to show the June 2, 2026 amendment to subsection (c).

Relationships

Supersession means a later instrument replaces the earlier legal effect. Repeal links identify the repeal instrument and the measure it ends. A later implementation or related letter is not treated as a replacement unless the record says so.

  • No related action is recorded.

Sources

Primary source

https://prdext2.cga.ct.gov/current/pub/chap_588n.htm#sec_32-286

Back to the policy tracker · Connecticut policy module