The Data Center Divide
A policy snapshot ahead of the 2026 midterms. Mapping data center incentives, restrictions, and bans through legislation, regulations, and executive actions across all 50 states and 1,462 local jurisdictions.
Kalawao County
For Kalawao County, see Hawaii’s statewide laws and regulations below. No additional county-specific measures are listed in our research.
Mixed Data Center Policies
Hawaii offers a temporary tax credit for some data-center technology upgrades, while facilities hosting consolidated state IT data must meet backup-system requirements. Other enacted actions call for studies rather than imposing general rules; a separate enacted law ends a related renovation credit starting in 2028.
Incentives
Tax benefits4
Temporarily reinstates the technology infrastructure renovation tax credit and expands eligible technology-enabled infrastructure to include data servers. The credit applies to eligible renovation costs for taxable years beginning after December 31, 2025, and before January 1, 2028.
For taxable years beginning after December 31, 2023, the measure temporarily reinstates the Technology Infrastructure Renovation Tax Credit and expands eligible technology-enabled infrastructure to include data servers.
Temporarily reinstates a tax credit for eligible technology infrastructure renovation costs and expands eligible infrastructure to include data servers. The credit is available for taxable years beginning after December 31, 2025, and before January 1, 2028.
Reduces individual income-tax rates in specified brackets, benefiting taxpayers subject to those rates. The bill’s income-tax rate changes are general and not specifically targeted to data centers.
current law · StatewideWould temporarily reinstate Hawaii’s technology infrastructure renovation tax credit, allowing a 4% credit for renovation costs for taxable years beginning after December 31, 2025, but not after December 31, 2027.Hawaii SB 2727 (2026)
What this means
The bill offers a 4% tax credit on eligible renovation costs and includes data servers, which can help data centers upgrade equipment. The credit is temporary and applies to eligible technology infrastructure costs, so it is a modest benefit rather than broad support for building new centers.
People behind it
- Department of Taxation
Required to report its findings and recommendations on collection of the tax credit to the Legislature.
Benefits & exceptionsHide benefits & exceptions1
Provides a 4% tax credit for eligible renovation costs incurred in Hawaii, including costs to plan, design, install, construct, repair, replace, monitor, test, or purchase technology-enabled infrastructure machinery and equipment, or to provide a commercial building with that infrastructure. Data servers are expressly included as technology-enabled infrastructure. The credit is available for taxable years beginning after December 31, 2025, and before January 1, 2028.
Sources
current law · StatewideRequires the Technology Services Consolidation Working Group to help the Office of Enterprise Technology Services work with state agencies—excluding the University of Hawaii, Department of Education, and Hawaii Health Systems Corporation—to assess the business criticality of major IT systems and data and set facility requirements accordingly.Hawaii SB 2526 (2022)
What this means
The measure applies only to facilities hosting consolidated state IT data, not data centers generally. It requires strong backup systems that could add costs for those facilities, but may also create demand for facilities that meet the standards, so the overall effect is limited. The facility requirements
People behind it
- Technology Services Consolidation Working Group
Assigned to assist the Office of Enterprise Technology Services with inventorying and categorizing major state information technology systems and determining appropriate data center or hosting facility requirements.
- Office of Enterprise Technology Services
Assigned to work with certain state agencies, with assistance from the Technology Services Consolidation Working Group, on the required system inventory and facility requirements.
Restrictions & requirementsHide restrictions & requirements1
A facility housing consolidated state information technology data must support concurrent maintenance or upgrades without downtime and have multiple power-generation and fuel-storage systems, power-distribution paths, cooling systems, and heat-exchange distribution paths, so it can keep operating if one system fails when utility power is unavailable.
Sources
current law · StatewideRequests the Hawaii State Energy Office to convene a working group to study the potential impacts of large data centers on Hawaii’s utilities, ratepayers, natural resources, and climate goals.Hawaii HR 196 (2026)
What this means
The measure requests a working group to study data center impacts and recommend possible actions. It does not itself add rules, costs, or delays for building or operating data centers.
People behind it
- Hawaii State Energy Office
Requested to convene and administer the working group.
- Chief Energy Officer of the Hawaii State Energy Office
Designated to chair the working group.
Sources
current law · StatewideThis proposal would direct a working group to plan relocation of an existing state data center and ensure resilient hosting for state data.Hawaii SB 2613 (2026)
What this means
The measure concerns transfers of public-school land and use of school buildings, facilities, and grounds, not data centers. It adds no meaningful data-center benefits or restrictions.
People behind it
- Department of Education
Named as grantee of the identified properties and authorized to administer their use and dispositions.
- Department of Land and Natural Resources
Identified as an owner responsible for conveying certain properties to the Department of Education.
- County of Kauai
Identified as an owner responsible for conveying certain properties to the Department of Education.
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- County of Maui
Identified as an owner responsible for conveying certain properties to the Department of Education.
Sources
current law · StatewideRequests the Hawaii State Energy Office to convene a working group to assess how large data centers could affect Hawaii’s utilities, ratepayers, natural resources, and climate goals.Hawaii HCR 206 (2026)
What this means
The measure asks the Hawaii State Energy Office to study data centers and possible safeguards, but it does not itself impose rules or costs on building or operating them (convene a working group). The study could lead to future proposals, but any effects would depend on later action.
People behind it
- Hawaii State Energy Office
Requested to convene and administer the working group studying the potential impacts of large data centers.
Sources
current law · StatewideWould revise Hawaii income-tax rules, including the renewable energy technology tax credit.Hawaii SB 3125 (2026)
What this means
The bill removes a tax credit for renovating commercial buildings with technology infrastructure, including power and environmental systems that data centers may use (technology infrastructure renovation tax credit), effective January 1, 2028. That could make some upgrades more expensive, but the bill does not add limits on building or operating data centers.
People behind it
- Hawaii State Energy Office, Department of Business, Economic Development, and Tourism
Administers renewable-energy tax-credit certification and application processes and reports on renewable-fuels production.
- Department of Taxation
Administers tax-credit claims, including preparing forms and auditing or adjusting credit amounts.
- Director of Taxation
Prepares tax-credit forms, may request information and adopt rules, and may audit and adjust certifications.
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- Chief Energy Officer of the Hawaii State Energy Office
Submits the required annual report on renewable-fuels production and sales.
Sources
current law · StatewideRequests the Hawaii State Energy Office to convene a working group for a study of the potential impacts of large data centers on utilities, ratepayers, natural resources, and climate goals.Hawaii SR 90 (2026)
What this means
The resolution asks the Hawaii State Energy Office to study data centers and recommend possible safeguards, but it does not itself impose new rules or costs on data center projects. The group is asked to report its recommendations before the 2027 legislative session (submit a report of its findings and recommendations).
People behind it
- Hawaii State Energy Office
Requested to convene and chair a working group to study the potential impacts of large data centers and recommend safeguards.
Sources
failed · StatewideWould temporarily reinstate Hawaii’s Technology Infrastructure Renovation Tax Credit for taxable years beginning after December 31, 2023, with availability ending after December 31, 2026.Hawaii HB 1784 (2024)
What this means
The bill would temporarily restore a tax credit for technology renovations and include data servers, which could make upgrades to data center facilities less costly (adds data servers to the definition). The benefit is limited to renovation costs and taxable years through 2026, so it is helpful but not a broad incentive for building or operating data centers.
Benefits & exceptionsHide benefits & exceptions1
Temporarily reinstates the Technology Infrastructure Renovation Tax Credit for taxable years beginning after December 31, 2023, and before January 1, 2027, and expands eligible technology-enabled infrastructure to include data servers. The credit applies to qualifying renovation costs for technology-enabled infrastructure in a commercial building, subject to the requirements of the tax-credit statute.
Sources
failed · StatewideWould establish a State of Hawaii Film Commission within the Department of Business, Economic Development, and Tourism to support the film and media industries through a five-year strategic plan, policy recommendations, industry partnerships, permitting coordination, and indigenous storytelling initiatives.Hawaii HB 1493 (2026)
What this means
The bill establishes a commission to support Hawaii’s film and media industries, but it does not add rules, incentives, or protections for data centers. It therefore has no meaningful effect on building, expanding, or operating them (film commission).
People behind it
- Department of Business, Economic Development, and Tourism
The State of Hawaii Film Commission is established within the department's Creative Industries Division, and the department is directed to expend the appropriated funds for the Act's purposes.
- Creative Industries Division
The State of Hawaii Film Commission is established within the division for administrative purposes.
Sources
failed · StatewideRequests the Hawaii State Energy Office to convene a working group to study how large data centers could affect Hawaii’s electric utilities, ratepayers, natural resources, and climate goals.Hawaii SCR 95 (2026)
What this means
The resolution asks the Hawaii State Energy Office to convene a working group and study possible safeguards; it does not itself impose rules or costs on data centers. Any practical effect would depend on later recommendations and actions.
People behind it
- Hawaii State Energy Office
Requested to convene the working group and submit its findings and recommendations.
- Chief Energy Officer of the Hawaii State Energy Office
Requested to chair the working group.
Sources
failed · StatewideWould broadly repeal Hawaii tax credits and exemptions, except those pertaining to individual income tax, beginning in the 2009 taxable year, affecting the tax treatment of individuals and other taxpayers under numerous state tax provisions.Hawaii HB 1900 (2008)
What this means
The bill repeals the public Internet data center tax exemption, but that exemption applied only through December 31, 2005 (“not after December 31, 2005”). Because it had already expired, removing it would not meaningfully change the costs of building, expanding, or operating data centers.
People behind it
- Director of Taxation
Assigned tax-administration duties, including preparing forms, adopting rules, and auditing or adjusting tax-credit claims.
- Department of Taxation
Receives notices and tax information and administers tax provisions in the measure.
- Department of Business, Economic Development, and Tourism
Assigned duties to maintain records, verify qualifying costs or investments, certify credits, and report on specified tax-credit programs.
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- Director of Business, Economic Development, and Tourism
Assigned duties related to administering and reporting on the ethanol facility tax credit.
- Department of Education
Assigned duties to verify and record contributions eligible for the public-school repair and maintenance tax credit.
- Department of Accounting and General Services
Assigned to determine and certify the value of in-kind services for the public-school repair and maintenance tax credit.
- Hawaii Housing Finance and Development Corporation
Assigned to adopt rules with the director of taxation for the housing-project tax exemption.
- Director of Health
Assigned to certify air-pollution-control facilities for the related tax exemption.
Restrictions & requirementsHide restrictions & requirements1
Repeals the general excise tax exemption for income and proceeds received by public Internet data centers. The exemption applied only to income and proceeds received after June 30, 2001, and before January 1, 2006, so it had already expired before this measure.
Benefits & exceptionsHide benefits & exceptions1
Until December 31, 2008, the general excise tax does not apply to amounts received for services one related entity provides to another, including use of computer hardware or software, information technology services, and database management. The entities must meet specified affiliation or ownership tests.
Sources
failed · StatewideWould restrict Hawaii’s general excise tax exemption for public internet data centers to income or proceeds received by the data center itself, and prohibit transferring the exemption to a parent, affiliate, or other company (“may not be taken or transferred”).Hawaii SB 834 (2003)
What this means
The bill keeps the tax exemption for public data centers but says it cannot be transferred to a parent or affiliate and applies only to the center’s own revenue. That modestly limits tax savings for some companies, but it does not make building or operating a public data center harder in other ways.
People behind it
- Director
Authorized to adopt rules, including penalties, to prevent misuse or abuse of the exemption.
Restrictions & requirementsHide restrictions & requirements1
The public internet data center GET exemption cannot be taken or transferred to a parent, affiliate, or other company, and applies only to gross income or proceeds received by the data center itself.
Benefits & exceptionsHide benefits & exceptions1
Retains a general excise tax exemption for gross income or proceeds received directly by a qualifying public internet data center. The facility must be available for compensated public use, house data servers, operate 24/7, have specified redundant systems, and provide services such as bandwidth or colocation. The exemption cannot be transferred to a parent, affiliate, or other company and applies only to data-center revenue received through December 31, 2005.
Sources
failed · StatewideWould temporarily reinstate Hawaii’s Technology Infrastructure Renovation Tax Credit to encourage upgrades to infrastructure that support reliable services and resilience against weather-related damage and cybersecurity threats.Hawaii SB 338 (2025)
What this means
The bill would offer a 4% tax credit for eligible renovation costs and specifically include data servers as eligible technology infrastructure, which could help data centers upgrade or expand equipment. The benefit is temporary, ending after 2027, and applies to renovation rather than providing a broad incentive for all new construction or ongoing operations.
Benefits & exceptionsHide benefits & exceptions1
Reinstates a 4% tax credit for qualifying renovation costs in Hawaii, including costs to plan, design, install, construct, repair, replace, monitor, test, or purchase technology-enabled infrastructure machinery and equipment. The expanded definition includes data servers, making eligible infrastructure relevant to data centers. The credit applies to taxable years beginning after December 31, 2025, and is unavailable for taxable years beginning after December 31, 2027.
Sources
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