To qualify for the tax-exemption agreement, a data center must make a qualified investment within five years: at least $50 million in an enterprise or federal opportunity zone, or $200 million elsewhere. Only eligible, nonduplicative costs count, and costs for property outside the facility are excluded. The investment must be made by the fifth anniversary.

The owner must enter into a negotiated host municipality fee agreement before construction, rehabilitation, renovation, or repair begins. An agreement is required for each facility and, if a facility crosses municipal boundaries, with each municipality; it must address payment of otherwise-exempt property taxes and possible penalties and interest. No construction may commence without an agreement.

The data center must pay an annual fee set by the commissioner, capped at $50,000, during the five-year qualifying period or until it reaches the required investment, whichever comes first. The annual fee may not exceed fifty thousand dollars.

The tax-incentive agreement generally lasts 20 years, and its provisions continue to apply to subsequent owners, operators or their affiliates, and colocation tenants for the agreement’s remaining term, provided the facility continues to be used as a qualified data center. The agreement shall be applicable to any subsequent owner.

If the municipality finds the host-fee agreement is not being followed, the data center has 180 days after notice to cure the noncompliance. If it does not, the agreement may be terminated and the data center or property owner becomes liable for the previously exempt property taxes from the date of noncompliance. The qualified data center shall cure such noncompliance.

If the state terminates the tax-incentive agreement for noncompliance, the host municipality fee agreement also terminates, and applicable sales and use taxes, penalties, and interest may become due; the state may collect them and place a lien on the data center’s real estate. The commissioner terminates an agreement.

Owners, operators, and colocation tenants may apply for tax-incentive agreements if the facility will be a qualified data center and meets the five-year investment minimum: $50 million in an enterprise or federal opportunity zone, or $200 million elsewhere. Agreements generally last 20 years, and the data center pays an annual administrative fee of up to $50,000 during the qualifying period or until it reaches the investment minimum, whichever comes first. The five-year investment thresholds

Qualifying data centers receive sales and use tax exemptions for eligible data-center equipment, specified services used to develop or operate the facility, and all electricity used by the data center. The exemption also applies to the data center’s contractors and subcontractors. The equipment, services and electricity exemption

The agreement provides a property-tax exemption for real property, buildings, structures, and qualifying enterprise information technology equipment at the data center. The owner must first enter a negotiated host-municipality fee agreement; facilities in contiguous municipalities require agreements with each municipality. The property-tax exemption

During the agreement term, the exemptions can cover additional data-center buildings and equipment, as well as additional equipment, services, and electricity acquired later. Property-tax exemption may also cover an additional facility acquired by the owner, provided it has a host-municipality fee agreement. Additional buildings, equipment and facilities

The agreement must be extended to 30 years if investment reaches $200 million in an enterprise or opportunity zone, or $400 million elsewhere. The 30-year extension thresholds

A data center meeting those higher investment thresholds, along with its operator or affiliate and colocation tenants, is exempt for 30 years from any state financial-transactions tax or fee imposed on trades of stocks, bonds, derivatives, or other financial products. The financial-transactions tax exemption

The Department of Economic and Community Development must act as a liaison, assist applicants and data centers from preapplication through post-operation, and seek coordinated and timely responses from state agencies. The 2026 act assigns these duties to the department rather than a separate office. The department’s data-center assistance duties

Before construction, rehabilitation, renovation, or repair begins, the owner must negotiate a host-municipality fee agreement; agreements are required for each host municipality and each additional facility. The owner has entered into a negotiated host municipality fee agreement

Access to the tax-incentive agreement requires DECD approval and a qualified investment within five years: at least $50 million in an enterprise or federal opportunity zone, or $200 million elsewhere. at least fifty million dollars

The DECD agreement must require an annual fee, set by the commissioner at no more than $50,000, during the qualifying period or until the investment threshold is reached, whichever comes first. not to exceed fifty thousand dollars

A municipality may notify the data center of noncompliance with its fee agreement; the center has 180 days to cure, after which the agreement may be terminated and property taxes, penalties, and interest may become due on previously exempt property. not later than one hundred eighty days

DECD may terminate its agreement if the agreement or data center requirements are not met; termination ends the municipality fee agreement and can make exempted state taxes, penalties, and interest payable. requirements of such agreement or of a qualified data center are not being met

A DECD agreement can provide sales and use tax exemptions for qualifying data-center equipment, related taxable services, and electricity used by the center. Covered equipment includes computing, power, cooling, water-conservation, networking, monitoring, security, and modular-center equipment. The applicant must meet the investment requirement within five years: at least $50 million in an enterprise or federal opportunity zone, or $200 million elsewhere. The agreement generally lasts 20 years, extended to 30 years at higher investment levels. The exemption covers qualified equipment, services, and electricity.

A DECD agreement can exempt real property, buildings, and structures at a qualified data center, as well as enterprise information technology equipment, from the state property tax. The exemption also covers qualifying additional buildings and equipment acquired during the agreement; additional facilities require a host municipality fee agreement. The exemption applies to real property and enterprise information technology equipment.

For centers meeting the higher investment thresholds—$200 million in an enterprise or federal opportunity zone, or $400 million elsewhere—the measure exempts the center, its operator or operator affiliate, and colocation tenants from any state financial-transactions tax or fee on specified financial products. The exemption lasts 30 years from facility completion. The exemption applies for a period of thirty years.

The Office of Data Infrastructure Administration and Security must assist applicants and data centers from preapplication through post-operation, liaise with state agencies, and seek coordinated, efficient, and timely responses. The office shall provide assistance.

The agreement’s provisions continue to apply to a subsequent owner, the operator or its affiliate, and colocation tenants while the facility remains a qualified data center, helping preserve the agreement’s terms through changes in ownership or operation. The provisions of the agreement shall be applicable.